Never worked, state pension??

chella

I was just wondering what happens in the following situation.


Male aged late 30s, never been employed, doesn't want to be. Lives at home with parents who pay the household bills. Said male is claiming selff employment, an amount of profit of about a thousand a year in order to claim maximum tax credits.


Has never paid voluntary national insurance payments.

He has no disability, does not care for anyone etc.
I said he surely wont be entitled to a state pension, the whole point of paying national insurance is so you can claim a state pension.


can someone clarify what he would be entitled to? (apart from a kick up the backside for being lazy)

ermine

chella wrote: »

can someone clarify what he would be entitled to? (apart from a kick up the backside for being lazy)

Nobody can do that, because we don't know what Britain will be like in 40 years time.

For example, perhaps the future economy doesn't need people other than the very best - machines will do the rest. That would lead to some kind of universal income and hopefully the end to the stupidity with which current governments torture the unemployed with the mantra that there is work for all of them, where it is patently obvious there isn't. In that case he'll be fine.

Or perhaps there will be an energy crunch, and skilled and manual work will return. In that case he's probably out of luck.

Some people say the state pension is deeply flawed and won't be funded by the time he gets to SP age or it will have drifted up in age too much. In which case he will have done okay.

The main issue he will have is he is designing a lifestyle where he needs the forebearance of others. On the upside he doesn't have to work for The Man. On the downside some government one day could make his daily existence pretty unpleasant. It's his life, his call. At the moment he isn't building up any pension entitlement, but there still may be sometling like pension credit.

chella

he thinks that the government don't leave anyone penniless, regardless and if he isn't entitled to a state pension then there will be some other benefit to fill the gap.

HappyMJ

There might just be. He won't get much. If he has assets excluding the home he lives in then he'll be expected to live off that until it gets low.

If he inherits the property at least he'll have a home to live in.

Torry_Quine

If someone in the situation you describe reaches retirement age currently then they would be entitled only to means tested benefits such as pension credit. However he is still young and who knows what will be the situation in the future.

xylophone

https://www.gov.uk/new-state-pension/overview

zagfles

Have HMRC not investigated him yet? How many years has he been doing this for? Self employed on low income have been a prime target over recent years. If he's not disabled and no kids he'll need 30 hours to get WTC, if he's only declaring a thousand profit and has been doing this for a few years then I find it hard to believe HMRC haven't investigated yet.

Re your question - he'll probably get credits for the state pension through WTC and the small earning exception for the SE, see https://www.gov.uk/national-insurance-credits/eligibility

But whether he gets the state pension or not won't really matter as pension credit is worth more than state pension (currently), if he has zero state pension and zero other income in retirement he'll get more than the basic state pension in pension credit. Under the new single tier rules it'll be about the same.

Obviously this could change in the future - but I very much doubt they'll leave pensioners to starve.

atush

There will be no pension credit after april 2016, and i believe there is talk about making 10 years credits necessary for receipt of any level of SP.

So he would have to self fund from his parents assets after they die, or they could kick him out now and he could find a job?

chella

he has been doing it on and off since he left school. He doesn't want to go to sign on, and the self employment route fits his lifestyle.


Business is conveniently a cash in hand one, he of course makes more than a thousand, not mega bucks, but more than he declares. About £130 a week.


I don't know if he has ever been investigated but he says he gives the tax man all the paperwork he needs. he declares 30 hours but says the business doesn't earn him much.


Pretty sure they have been tipped off but how on earth can they see what cash he actually takes, anyhow that's a whole other kettle of fish.


Thanks for the replies.

chella

he is a typical man child, nearly 40 never left home, never done anything in life, no real desire to do anything apart from video game. But that's not my problem, I just wanted to know if I was right about not getting a pension or not.


I have no doubt he will live at home until his parents die.

d123

atush wrote: »

There will be no pension credit after april 2016, and i believe there is talk about making 10 years credits necessay for receipt of pany level of SP.

Are you sure? I was under the impression that it was the Savings Credit element that was closing (and gov.uk seems to say the same).

Pension Credit is an income-related benefit made up of 2 parts - Guarantee Credit and Savings Credit.

Guarantee Credit tops up your weekly income if it’s below £148.35 (for single people) or £226.50 (for couples).

Savings Credit is an extra payment for people who saved some money towards their retirement, eg a pension.

You may not be eligible for savings credit if you reach State Pension age on or after 6 April 2016.

You don’t pay tax on Pension Credit.

https://www.gov.uk/pension-credit/overview