unmarried couple NI contributions

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
1 reply 1.2K views
inky220inky220 Forumite
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i have been thinking of making sure i will qualify for a full pension when i reach pension age. I have been with partner for 8 years and am not married and dont plan to be so i also have no children so cant get credits there, at present i have accured qualifying years to date bar 2 years and dont want to miss anymore, i am 39. my partner is self employed and pays class 2 NI at £2.05 a week (could may partner pay class 2 credit for me here even though i am not classed as self employed) and signs on in winter when seasonal work finishes and is then credited with NI credits. I at present help out (unpaid) with partners business and work part time earn under the threshold so dont earn enough to qualify , i also know if i carry on this way when i reach pension age i would not be able to claim on partners pension because we are not married. can anyone suggest how i should go about this i have thought paying voluntary ni contributions and at £7.15 a week we will find it a struggle to pay during the winter months when my partner signs on ,paying voluntary ni contributions also does not cover me for incapicity benefit should i need it. Another option i thought of was when my partner signed on in the winter he could also put me on with him that way i would get full credits and when he signs off i could then pay voluntary ni contributions but that would then mean i would not be entitled to incapicity benefit should i need it. im sorry this is long winded but i dont know which way to go and at the end of the day i want to make sure i get full pension and if i ever needed it incapcity benefit. thankyou for any comments

Replies

  • MilarkyMilarky Forumite
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    [glow=red,2,300]Welcome to MSE.com[/glow]  :D

    In answer to your post, I'll just throw in a few thoughts - and hope others will chip in/correct these as appropriate.... [I've posted a link here from the 'Benefits' section, which is hosted by Fran] Others will see that and come here..

    As I see it

    1) Your partner is self-employed and pays flat rate class 2 NIC [£2.15 pw] This is a good start, since for a lot less than the £7.15 per week that you pay, he is 'covered' for State Pension and Incapacity Benefit, whereas your class 3 NIC only covers future State Pension entitlement.

    2) I'm not sure about this [a question for the experts..] but I think that for Incapacity Benefit, your partner needs to keep paying class 2 even if he stops earning and 'signs on' for 'National Insurance Credited Contributions'? Again, I'm hazy on this - it may be that signing on does 'cover' the person for both ICB and future pension... As these are quite closely related benefits it would make sense if the 'credited contribution' did cover both items.

    3) You work for someone else but don't earn enough from this to reach the 'lower earnings limit' [about £78pw ??] This is unfortunate, since reaching this level doesn't trigger any NIC charge to either you or the employer, but you then become 'covered' for all NI benefits mentioned and could stop paying the £7.15pw staightaway. NIC is only charged once you reach £91pw earnings - and then only on the amounts above this figure.

    4) If you could do even better and get a second 'PAYE' job, whilst earning at lest the LEL in the current job, you will not need to pay any NIC on this second job. This is because earnings are kept 'separate' for NI purposes even though they are always lumped together for income tax purposes. [I had two jobs for a number of years paying at or about the LEL. I effectively paid no NIC, whilst being 'credited' by the NI system as though I had one income combined]

    5) By earning anything above the LEL in the weeks that you are employed you also qualify sooner in the tax year for these benefits. But [conversely] by paying a flat rate to cover you whilst in work, and then signing during separate periods of time, you can only get this 'cover' if you sign on in every week when you are not paying class 3 NIC [and vice versa]

    6) If your partner 'signs on' out of season (continuing/ceasing payment of his class 2 NIC apart) I don't think that he can claim for you as a 'dependant' precisely because you are childless - and without 'caring' responsibilties, therefore. I think [again, stand to be corrected] that you would have to 'sign on' in your own right.

    7) You're 39 [and therefore over 25!] which means you are potentially eligible for Working Tax Credit. The basic condition here is to be working at least 30 hours [in combination I trust?] and be earning somewhere between £5100 and £11,000 pa. It's far from straightforward to claim, however, but would be something you ought to explore whilst your circumstances remain as they are.

    8) For pretty-well complete advice, can I strongly recommend you contact a local Citizen's Advice Bureau? Thet are 'free' [But don't phone them on any '0870' numbers though!  Bureaux have started to use these and it goes right against their ethos, AFAIAC  >:(] and genuinely independent, and completely confidential also - if asking for advice is a sensitive matter for you. They will in any case give you the information to allow you to make better sense of all these matters...

    9) [But don't stop posting either!] Hopefully you can get all the best ideas from here  :D
    .....under construction....
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