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Pensions and National Insurance - advice sought

Would really appreciate some thoughts on a pretty sticky situation my mother has landed herself in. She's 61 and is five years off receiving her state pension. She is currently divorcing my father.

My father was self employed and has his own business. After she married him, she worked for him as an employee.

Essentially she has worked for him for over 30 years. However now that she's planning her future without him, HMRC have informed that she only has 23 years on her National Insurance record as my father failed to declare any tax or NI contributions for over 7 years.

It would of been impossible for my mother to be exempt under low income rules as she worked 8+ hours per day, 6 days per week (it was in hospitality) - so if she was, then my father would of breached minimum wage rules.

Under the new system therefore, she will not be able to eligible for the standard state pension when she hits 66. She's currently struggling to find a job given her age and lack of "outside world" experience - so she's currently on ESA. While this will provide her with NI credits for the meantime, I do not think it is fair that my father has effectively screwed her over and she will still be two years off when she hits retirement.

She was never given any payslips and in fact, did not even have access to her own wages - so it would be difficult to prove on paper. My mother left with home with very limited savings and funds - so would not be able to afford a lengthy court battle to split finances. She's relying on mediation so that he will 'come clean' and split the finances - but it is clear that my father is stalling (either contesting, rejecting, sending unreasonable letters to her solicitor or simply ignoring correspondence).

She's currently only able to afford the processes for separating.

He wasn't a very nice person - for example he had a private pension for himself, but not for my mother. He wouldn't allow my mother to have her own bank account and when I was injured in an accident, wouldn't allow her to come to visit me as 'they had a business to run'.

My mother was very naive and thought he would be able to look after her when they both retired - but unfortunately his behavior eventually meant my mum had no choice but to divorce him.

Would appreciate on what we think my mother could do. Could she for example, get legal aid to contest her NI record and to sort out the finances? Should she include a sum allowing her to buy her contributions in her finance split demand? Or is there a system which she can contest?

Comments

  • dunstonh
    dunstonh Posts: 119,868 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    edited 9 October 2015 at 1:03PM
    You may have better responses posting in a section relevant to your query. Your thread is off-topic for this section.
    My father was self employed and has his own business. After she married him, she worked for him as an employee.

    Are you sure about this?

    If your father was self employed then you would expect your mother to be as well (as a partnership). It would be unusual for the husband to be self employed (paying class 2 NI) and the spouse being employed (paying class 1). Certainly possible but unusual.
    It would of been impossible for my mother to be exempt under low income rules as she worked 8+ hours per day, 6 days per week (it was in hospitality) - so if she was, then my father would of breached minimum wage rules.

    Minimum wage doeesnt apply to self employed (if she was).
    I do not think it is fair that my father has effectively screwed her over and she will still be two years off when she hits retirement.

    It sounds as if he used the spouse as a method to reduce the tax bill.
    She was never given any payslips and in fact, did not even have access to her own wages

    Which again, hints at self employment rather than employment. Although he could just have been a nightmare on admin.
    He wasn't a very nice person - for example he had a private pension for himself, but not for my mother.

    Not unusual for that generation. Plus, she may not have been able to pay into a pension as the current contribution rules only started in 2001.
    Would appreciate on what we think my mother could do. Could she for example, get legal aid to contest her NI record and to sort out the finances?

    Evidence is going to be important. Did he use an accountant? Does the accountant have any record of her employment (or self employment)? i.e. if he was putting her through the books but not doing it correctly then that is likely to be tax evasion. He may wish to avoid that.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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