Do I need to pay N.I. contributions?

Figure11

Hi,

My first post. I have been ghosting on here many times and always found useful information. Hopefully someone can answer my question.

I retired from the Royal Navy last year after 35 years service and now draw a pension which sees me finacially safe.

I am in the process of finding employment and would like to earn a bit more money (as I’m sure we all would). I would prefer to get my work life balance right so salary isn't of prime importance. However, giving the government more money after many years of higher tax band and full NI contributions is to be avoided (I mean avoided!) wherever possible.

So the question is, do I have to pay NI on future earnings from employment even though I have 35 years of full contributions under my belt and qualify for a full state pension? Is there a lower limit for income at which I can claim back NI contributions?

Thanks in advance,

Mike

CKhalvashi

Figure11 wrote: »

Hi,

My first post. I have been ghosting on here many times and always found useful information. Hopefully someone can answer my question.

I retired from the Royal Navy last year after 35 years service and now draw a pension which sees me finacially safe.

I am in the process of finding employment and would like to earn a bit more money (as I’m sure we all would). I would prefer to get my work life balance right so salary isn't of prime importance. However, giving the government more money after many years of higher tax band and full NI contributions is to be avoided (I mean avoided!) wherever possible.

So the question is, do I have to pay NI on future earnings from employment even though I have 35 years of full contributions under my belt and qualify for a full state pension? Is there a lower limit for income at which I can claim back NI contributions?

Thanks in advance,

Mike

Hey Mike,

The limit for everyone this tax year is £7470, and over this, unless you are over 65, you will have to pay both tax and NI, from the rules as myself and my joint director understand them.

The best thing to do would to speak to your pension provider and get impartial advice from them.

Many thanks

Vika

antrobus

Figure11 wrote: »

So the question is, do I have to pay NI on future earnings from employment even though I have 35 years of full contributions under my belt and qualify for a full state pension?

Yes.

(And a bit of filler.)

Savvy_Sue

Yes until you're old enough to stop. Unless it's a low paid job and you don't earn over the Lower Earnings Limit (roughly £100 pw).

Just wondering if a part-time job (under the LEL) and some volunteering would fit the bill?

And welcome ...

agrinnall

CKhalvashi wrote: »

Hey Mike,

The limit for everyone this tax year is £7470, and over this, unless you are over 65, you will have to pay both tax and NI, from the rules as myself and my joint director understand them.

The best thing to do would to speak to your pension provider and get impartial advice from them.

Many thanks

Vika

The personal allowance has nothing to do with NI, which as Savvy-sue has pointed out has it's own earnings limits. If you and your joint director are unaware of this perhaps a little self-education would be in order, this is a good place to start http://www.hmrc.gov.uk/ni/index.htm.

molerat

Earn less than £139 per week (£602 per month) this FY (£146 / £632 next FY) and there will be no NI to pay. Ni is deducted per pay period and can not normally be refunded ie if you earn enough to pay NI in April and did not work after that NI could not be reclaimed unlike income tax. Don't forget you will be taxed at least 20% on all earnings in the pt job.

PlutoinCapricorn

Income Tax and NI are calculated differently, as others have said.

If you had two part-time jobs, you might escape the NI as the income is treated separately; your only other option is to wait until you reach the official retirement age - which may increase- then inform your employer(s) that you no longer wish to pay Class 1 NI as you have paid enough contributions.

It is different for the self-employed: if you earn under a certain limit - again this changes but is around £5,000, you can elect not to pay Class 2
contributions as you have already qualified.

Figure11

Thanks to all of you. It's interesting to note that a couple of part time jobs may fit the bill. I accept paying income tax is necassary but to pay a contribution toward my health and pension that others will pay less for and get an identical state pension (i.e one person pays 35 years and a second pays (possibly) 48 years) grates a wee bit.

Mike

Savvy_Sue

Figure11 wrote: »

Thanks to all of you. It's interesting to note that a couple of part time jobs may fit the bill. I accept paying income tax is necassary but to pay a contribution toward my health and pension that others will pay less for and get an identical state pension (i.e one person pays 35 years and a second pays (possibly) 48 years) grates a wee bit.

I think it's a myth that NI goes towards health and pension whereas none of your tax does. And I think the system would be better if we had just the one tax on employment rather than pretending that they were separate.

But that's a separate issue.