Should I bother paying National Insurance Contributions?

davejuk_2

I'm self-employed and have just had a letter from HMR&C telling me that there's a gap in my NICs for 2006-07. It asks if I want to make up the gap and says I already have 4 years. The cost of making up the gap is £211.40.

My question is, is it worth paying?

I'm 23, my business is growing fast, and I've just bought my first house. In the next 6 months I intend on buying another to let and I expect to have other significant investments by the time I retire.

If I still have a significant income from my investments when I retire, will I even be entitled to a state pension?

Does it represent good value for money if I live to 78, bearing in mind I'll have to make another 25 payments like this to qualify?

begbie_2

Well depends on your earnings really, Self employed pay £2.30 per week i think, If you earn above approx £6000 through your self employment it is a requirement..i used to work in the dcu for class 2 NI... they can send out the baliffs... If you earn less than the earnings level, you can apply for a Small earnings exemption. Good Luck!!

Bean_Counter

Firstly, is the letter correct in stating that you have a shortfall? I know that many people at our work have erroneously received letters stating that they have a shortfall, when if fact they have not.

moneypooh

It may also affect any sickness benefit (should you need it) if there is a 'gap' in contributions

alared

davejuk wrote: »

I'm self-employed and have just had a letter from HMR&C telling me that there's a gap in my NICs for 2006-07. It asks if I want to make up the gap and says I already have 4 years. The cost of making up the gap is £211.40.

My question is, is it worth paying?

I'm 23, my business is growing fast, and I've just bought my first house. In the next 6 months I intend on buying another to let and I expect to have other significant investments by the time I retire.

If I still have a significant income from my investments when I retire, will I even be entitled to a state pension?

Does it represent good value for money if I live to 78, bearing in mind I'll have to make another 25 payments like this to qualify?

Firstly,you seem to be doing very well in these difficult times,so why are you worrying about £211.
Secondly,at the moment, a male has to pay 44 years NI stamps to obtain a full state pension.
BUT from 2010 this is being lowered to only 30 years over your working life.
Whether self employed comes under the same rules,I don`t know.
You would have to look it up.
Thirdly,I`m wondering why I`m actually trying to answer this post,which is clearly a wind-up.

Have a nice day:D

chriiiiiiiis

alared wrote: »

Thirdly,I`m wondering why I`m actually trying to answer this post,which is clearly a wind-up.

Why do all the regular posters on this forum assume that if a person has only one post, it's a wind up? Did this happen when you made your first post?

davejuk_2

alared wrote: »

Firstly,you seem to be doing very well in these difficult times,so why are you worrying about £211.

I'm doing OK but you don't get rich by writing cheques!

alared wrote: »

Thirdly,I`m wondering why I`m actually trying to answer this post,which is clearly a wind-up.

I assure you it's not a wind up.

patchy987

take it from someone who was in exactly the same position as yourself 3 years ago, its worth paying it.

i decided not to and then due to a lifetime illness and severe depression i am unable to work for an indefinate period but can't get disability.

my husband is now working 2 jobs because i hadn't paid enough NI so i cannot get incapacity.

don't always assume you will be as successful as you are now

davejuk_2

patchy987: Thank you for your advice; I think I probably will pay it.

I already pay for so much insurance - it's difficult to know what i need and don't need and which policies might overlap. I already have a life and critical illness policy and buildings and contents with legal assistance. Not to mention others such as travel insurance, motor insurance and breakdown cover!

alared

davejuk

Obviously I don`t know how old you are and how many years you`ve got to get your required 30 years in.
But if you feel you have plenty of time to do so ,then don`t pay the £211.
I wouldn`t.

I know of a couple of people, who are approaching sixty, and have paid in over 30 but not the full 44 years,who are being pestered to pay their shortfall.
But because the rules are being changed in 2010 they are not going to bother because they will get the full pension anyway when they reach 65 after 2010.

Merry Christmas