National Insurance - contributions shortfall.

JeremyZerg

Hi,

I received a letter a while back from the Inland Revenge, suggesting that the National Insurance contributions I'd paid in one tax year were insufficient.

(Basically, I was at university for most of the year and then worked part-time in the summer. I paid no tax, but NI contributions were taken for the few months I was in gainful employment.)

They did not demand extra payment - it's not like I cheated them out of anything - but the money I'd paid as NI contributions did not meet the government threshold, therefore will not "count" in terms of "the number of years for which one has contributed to NI".

I think one has to work a set number of years, making payments into NI for each of these, before one is entitled to the basic State Pension.

Anyway, questions:

1. Is it worth forking over the extra cash (voluntarily) to gain one extra year in the government check-box?
2. If I decide not to, can I reclaim the money I paid in? (I very much doubt it.)
3. Or, perhaps feasible, can I pool two "half years" as one "full year" - like, one NI contribution for the two (or even three) years I worked part-time whilst at uni?

It seems rather unfair that I'm essentially paying money to the government for no calculable return.

Obviously, I'm paying into a larger "pot", so there will be a slightly greater amount from which to draw an income when I'm 65. (Or more likely, 75 - by the time I retire, I expect the age at which one might expect the state pension to kick in to be around this figure!) But it still sucks that nothing registers on my personal tally of "completed payments".

Thanks for any help with this.

CIS

In general, you cant reclaim NI from the system once its paid in and part yrs can be pooled together (unless they're accrued pre 1975).

Under current rules each qualifying you gets you approximately £2 per week in Basic State Pension, under the new proposed rules you would get around £2.90 per week or so.

Whether or not is worth paying depends on what your future pension record will be like and due to the proposed changes in legislation, its becoming harder to estimate.

Try getting a State Pension Forecast from https://www.thepensionservice.gov.uk.

JeremyZerg

Thanks, CIS.

In general, you cant reclaim NI from the system once its paid in and part yrs can be pooled together (unless they're accrued pre 1975).

I didn't expect to be able to reclaim the cash. Bloody government. But it's good news that I might be able to pool my payments so as to complete one "full year".

I'll write to the taxman and enquire.

I think it's better, over the long term, to gain the extra year now (if possible). I worked part-time for four or five years, so I may be able to claim a contribution for two full years.

Whether or not is worth paying depends on what your future pension record will be like and due to the proposed changes in legislation, its becoming harder to estimate.

I think I'll be ok anyway. Private pensions are definitey the way to go. But I'll still claim whatever the state can offer!

Ta.

Elaine_Wilson

Do write and tell them the dates you were at university.

You may be entitled to credits for those weeks.

playboy_bunnie

Elaine_Wilson wrote: »

Do write and tell them the dates you were at university.

You may be entitled to credits for those weeks.

That would only work if he/she was under a certain age.. once you get to my age (23 heh) credits are not applicable.

playboy_bunnie

JeremyZerg wrote: »

2. If I decide not to, can I reclaim the money I paid in? (I very much doubt it.)

No, in the eyes of the Rev, they have notified you of your status, and you have made the decision voluntarily to make a payment, therefore unless they had mis-informed you prior to payment, then no refund would be given.

nemo183

Do bear in mind that the rules that cover the number of years you have made NI payments for to qualify for a full state pension are soon to be revised downwards.

jem16

playboy_bunnie wrote: »

No, in the eyes of the Rev, they have notified you of your status, and you have made the decision voluntarily to make a payment, therefore unless they had mis-informed you prior to payment, then no refund would be given.

I think the OP is talking about the automatic NI contributions that came off his part-time wages and not any that he might make voluntarily.

JeremyZerg

I think the OP is talking about the automatic NI contributions that came off his part-time wages and not any that he might make voluntarily.

Indeed I am. The issue is whether or not I ought to pool, or top up the contributions made so far - so as to make additional years "count".

That would only work if he/she was under a certain age...

He/she? D'oh! (I'm a guy.)

Letter to the Inland Revenge is drafted! I bet they have at least a two week turnaround time...

sharnad

3. Or, perhaps feasible, can I pool two "half years" as one "full year" - like, one NI contribution for the two (or even three) years I worked part-time whilst at uni?


If you mean the class 1 national insurance contributions that you have paid in different years no you can not pool them together

you can pay class 3 voluntary to make the years count