Shortfall in National Insurance Contributions

jancee_2

seven-day-weekend wrote: »

When I said my partial year counted, it wasn't a final year before retirement, it was when I stopped work at 54.

My birthday is at the end of January, so if I'd been working mine wouldn't have counted either under the old rules (I believe it would under the new ones for people who reach retirement age after April 2010).

Fortunately I now have a full State Pension. When I gave up work, I had 24 paid years and 13 years HRP, so I only needed to pay two years of Voluntary Contributions which I have now done. My retirement date is January 2010.

sdw - I'm certainly not meaning to cast doubt on your assertion that this year counted. But it does seem to fall foul of the rule governing the minimum number of contributions needing to be made over a tax year.

From: http://www.opsi.gov.uk/acts/acts2007/en/ukpgaen_20070022_en_1.htm


'20. The first contribution condition is that the relevant insured person must, in any tax year since 6 April 1975, have actually paid Class 1 contributions on earnings of at least 50 times the weekly lower earnings limit for the tax year in question in respect of tax years 1975/76 - 77/78 or 52 times the weekly lower earnings limit for the tax year in question in respect of tax years from 1978/79 onwards. Equivalent number of Class 2 or Class 3 contributions will also suffice. Alternatively a claimant must have paid 50 flat-rate contributions at any time before 6 April 1975.'

So for example, someone who earned £5,000 in one week would satisfy the QEF [qualifying earnings factor] for the year but would have only made one NI contribution, which wouldn't make it count for a qualifying year.

Is it possible that your 'extra' year could be due to rounding up from pre '75 contributions?

seven-day-weekend

Well I don't know jancee. All I know is I rang them up and asked if it counted, and they said I had earned enough that year to qualify. That tax year I worked from April 6th-September 6th 2004, three days a week, and paid NI every month. I then gave up work altogether and moved to Spain.

It meant I only had to pay two years of voluntary contributions instead of three. I have now paid them.

I have a recent Pension Forecast saying I have a full State Pension. I receive it in January 2010.

GWEPM

When I asked for a Pension forecast, they didn't say which years qualified. They just gave a percentage entitlement (97%) which I take to mean that I have 1 year missing. It would have been more useful to have a print-out of which years they were counting so I could compare with my own records. Sadly, I have every single payslip since I very first worked and going back to student jobs in the '60s !

jancee_2

GWEPM wrote: »

When I asked for a Pension forecast, they didn't say which years qualified. They just gave a percentage entitlement (97%) which I take to mean that I have 1 year missing. It would have been more useful to have a print-out of which years they were counting so I could compare with my own records. Sadly, I have every single payslip since I very first worked and going back to student jobs in the '60s !

Once the forecast is produced you can call back and see which years have been used in the calculation.

It's good you kept your records! More people should do that - it makes proving things easier if human or computer error gets your contributions wrong.

GWEPM

jancee wrote: »

Once the forecast is produced you can call back and see which years have been used in the calculation.

Yes, I did that. It is 1976 which is why I cannot now buy it (>10 yrs ago) until the new legislation applies in April. When the cost will have been increased by 50%.

oldandgrumpy

Ed-investor...me again. I get the impression that, as my wife is 60 May 2009, she will have all she can get in the way of Qy's by the end of the tax year April 2009? So I need not worry that her carer's allowance will end at the end of March as there will be no shortfall between then and the end of May, her 60th. To be celebrated in Brittany!!!!!

EdInvestor

oldandgrumpy wrote: »

So I need not worry that her carer's allowance will end at the end of March as there will be no shortfall between then and the end of May, her 60th.

You appear to be OK. Enjoy the trip.

Mac57A

Just a note for all those women with shortfalls in pension from time out bringing up a family. If you reach retirement age and the IR explain you need to top up and you can provide information regarding your children and their ages which in turn matches your time out from NI Cont. then your state pension will be topped up automatically by the state!

:j

EdInvestor

Mac57A wrote: »

Just a note for all those women with shortfalls in pension from time out bringing up a family. If you reach retirement age and the IR explain you need to top up and you can provide information regarding your children and their ages which in turn matches your time out from NI Cont. then your state pension will be topped up automatically by the state!

:j

This involves claiming "Home Responsibilities Protection" years. NI is credited automatically for those who receive child benefit up to the age when the child turns 16, reducing to 12 after 2010. You can get these years officially credited any time, no need to wait until you retire.

jancee_2

Doesn't apply to those who were entitled to pay Married Woman's small stamp but yes. HRP began on 6 April 1978 so if you were in receipt of Family Allowance at that point it would have kicked in and covered years in which you either didn't work or didn't earn enough to pay NI.