Pension for wife (non-earner) help please!

beanie414

gadgetmind wrote: »

Well, anything she could earn would help, plus if she registers as self employed, she can choose to pay Class 2 NI even if not earning enough to have to. This costs about £130 a year and earns another qualifying year towards state pension. With the new single tier pension, this will be a screaming bargain as long as it lasts.

I see, I just read on Gov site that you could start your own business and you only need to make about £6,000 a year to get the contributions.

xylophone wrote: »

If she took a job she would probably ( depending on income) pay /be credited with NI in the normal way and be eligible for a workplace pension as well.

https://www.gov.uk/national-insurance/overview

https://www.gov.uk/workplace-pensions/about-workplace-pensions

Thanks for info.

atush

beanie414 wrote: »

My wife checked this morning but we didn't get the interest on the First Direct account yet although we have the full amount so I assume it should be maturing in the next month.

I forgot to mention as well she is getting £10,000 from a family member this year. We were going to replenish our savings as we thought we would be spending our savings on moving house but now we could use it for other things.



Ah, I thought you could only top up 6 years before?

It says on the letter that her state pension amount, based on NI contributions is £42 a week.

The basic SP is 9 qualifying years and is worth about £35 a week and the SERPs is about £7 a week.



She might be able to, is it a good idea for her to do that? We don't know much about that type of thing as she has only worked in the charity sector for most of her jobs.

She needs to get at least one more qualifying year, as the new min will be 10 years?

atush

neilvw wrote: »

The OP's wife won't be able to take her benefits until 57 under current Government plans.

While this change have been mooted, it has not been implemented at this time AFAIK.

neilvw

beanie414 wrote: »

Ah, I thought you could only top up 6 years before?

It says on the letter that her state pension amount, based on NI contributions is £42 a week.

The basic SP is 9 qualifying years and is worth about £35 a week and the SERPs is about £7 a week.

There's special dispensation regarding the deadline for voluntary contributions so that people can go back a bit further and boost their starting amount.

Thanks for confirming the figures, I was in the right ballpark.

gadgetmind

beanie414 wrote: »

you only need to make about £6,000 a year to get the contributions.

That's when you'd be *required* to pay Class 2, but you can pay it voluntarily. My wife earns < £500 pa, pays her £130 Class 2, and with each pension statement comes another qualifying year.

neilvw

atush wrote: »

She needs to get at least one more qualifying year, as the new min will be 10 years?

But she will have a starting amount in April of £42 or so because under the old-style calculation there was no minimum number of years.

neilvw

atush wrote: »

While this change have been mooted, it has not been implemented at this time AFAIK.

This is true, and on further investigation it appears it was dropped from the Taxation of Pensions Bill. It might appear in the Finance Act this spring I suppose.

beanie414

neilvw wrote: »

There's special dispensation regarding the deadline for voluntary contributions so that people can go back a bit further and boost their starting amount.

Thanks for confirming the figures, I was in the right ballpark.

But, as you were saying there is no rush to do that before April? Is that right?

gadgetmind wrote: »

That's when you'd be *required* to pay Class 2, but you can pay it voluntarily. My wife earns < £500 pa, pays her £130 Class 2, and with each pension statement comes another qualifying year.

Oh wow, really, that's a nice loophole.

I might have to think about that. So she could set up a type of business but it wouldn't have to make that much money a year but you would still get the benefit of the class 2. That seems like a good deal.

neilvw

beanie414 wrote: »

But, as you were saying there is no rush to do that before April? Is that right?

5 April 2019 to fill in gaps 2006-2016 at a preferential cost I think; 5 April 2023 is the absolute deadline to fill them. See the .gov page on voluntary NI.

Oh wow, really, that's a nice loophole.

I might have to think about that. So she could set up a type of business but it wouldn't have to make that much money a year but you would still get the benefit of the class 2. That seems like a good deal.

£231 a year of index-linked pension for an outlay of £130 is pretty spectacular.

gadgetmind

beanie414 wrote: »

Oh wow, really, that's a nice loophole.

Yes, I got it from a chap who registered as a self employed Sage/Poet after being forced to retire from manufacturing LSD. (This is actually true!)

I might have to think about that. So she could set up a type of business but it wouldn't have to make that much money a year but you would still get the benefit of the class 2. That seems like a good deal.

The rules may well change in future and she'll have to complete a tax return every year. The different employment situation may change car insurance but my wife's role actually made it cheaper than "Housewife".