Early retirement and NI contributions

Stubod

Hi,

Currently planning on taking early retirement, (6 years before SP due). Have sufficient funds that mean we will not be entitled to any "job seekers" allowance. However was just wondering what happens re NI contributions? Assuming no income, then no NI. But can you register as "unemployed" even though not eligible for any income, to get some NI credits?

anselld

Stubod wrote: »

Hi,

Currently planning on taking early retirement, (6 years before SP due). Have sufficient funds that mean we will not be entitled to any "job seekers" allowance. However was just wondering what happens re NI contributions? Assuming no income, then no NI. But can you register as "unemployed" even though not eligible for any income, to get some NI credits?

You can pay voluntary class 3 NIC.

Stubod

Hi and thanks for the reply, have checked out the website, but it says need to be born pre 1951 to make top ups?

molerat

That is for topping up post retirement age. Class 3 are voluntary contributions to make up lost years. You may not need to top up and in some cases paying to top up will have no effect on how much you receive. How old are you ? How many years do you currently have ? Have you had a pension forecast ?
https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions

brewerdave

You can register with Job Centre - you will get NI credits recorded - just make sure you set your sights for another job very high!!

scragend

Stubod wrote: »

Hi and thanks for the reply, have checked out the website, but it says need to be born pre 1951 to make top ups?

It's the other way round - you can't make Class 3 contributions if you have already reached state pension age. So as at today's date you need to have been born after 1951 (i.e. be under 65) to be able to make contributions.

When you can't pay Class 3 voluntary contributions
There are some circumstances when you won't be able to pay Class 3 voluntary contributions. The most usual ones are if:

• you're a married woman - or a widow - and you chose to pay reduced rate National Insurance contributions for the whole tax year for which you want to pay Class 3 voluntary contributions
• you reached State Pension age in the tax year for which you want to pay Class 3 voluntary contributions
• you're entitled to National Insurance credits (but there are a couple of exceptions to this)

You can get your National Insurance record online and find out about whether you can (or should) pay voluntary contributions.

https://www.gov.uk/voluntary-national-insurance-contributions

Stubod

Hi and thanks for the replies. Currently 59 and have had a forecast (about £140/wk as contracted out)..

Eligibility age criteria is for "top up":-
"To make a top up, you must be entitled to the basic State Pension or Additional State Pension and be either / a man born before 6 April 1951 / or woman born before 6 April 1953"

xylophone

https://www.gov.uk/jobseekers-allowance/overview

If you are looking for a job and have made the necessary NI contributions in the relevant years, then you can apply for JSA (Conts) which lasts for six months.

After that, it would be income based JSA for which you would not qualify.

However, provided that you were still job seeking, you could continue to sign on and get your "stamp".

Otherwise you can pay voluntary Class 3 up to your SPA or until you have reached £155.65, whichever comes earlier.

See http://www.thisismoney.co.uk/money/pensions/article-3535618/STEVE-WEBB-Buying-ups-paying-missing-NI-boost-state-pension.html

p00hsticks

Stubod wrote: »

Hi,

Currently planning on taking early retirement, (6 years before SP due). Have sufficient funds that mean we will not be entitled to any "job seekers" allowance. However was just wondering what happens re NI contributions? Assuming no income, then no NI. But can you register as "unemployed" even though not eligible for any income, to get some NI credits?

If you have made sufficent NI contributions over the last few years (currnetly tax years 2013-14 ans 14-15) then you can claim six months contributions based JSA (£73.10 a week) regardless of any savings, although a deduction will be made for any pensions in payment.
(if applying, don't get pushed in applying for Universal Credit instead - it is replacing income- based JSA but not contributions based)

BUT the clue is in the name - to qualify for Job seekers allowance you need to be actively looking for a job. You'll be expected to turn up at the job centrea at least fortnightly, up to daily, and demonstrate that you are actively looking for work, or risk getting your payments stopped.
You'll probably be allowed around twelve weeks when you can restrict yourself to something similar to your previous job but after that you'll be expect to apply for pretty much anything you can.

And if you've voluntarily resigned from your previous job (as opposed to being made redundant) then you could well find yourself sanctioned.

So if you are genuinely 'retiring', you are probably better off exploring making voluntary contorbutions for as many years as needed to ensure you get the maximum state pension

minty777

brewerdave wrote: »

You can register with Job Centre - you will get NI credits recorded - just make sure you set your sights for another job very high!!

They cannot sanction your NI credits if your only getting NI credits only

https://www.whatdotheyknow.com/request/national_insurance_credits_2

molerat

Stubod wrote: »

Hi and thanks for the replies. Currently 59 and have had a forecast (about £140/wk as contracted out)..

Eligibility age criteria is for "top up":-
"To make a top up, you must be entitled to the basic State Pension or Additional State Pension and be either / a man born before 6 April 1951 / or woman born before 6 April 1953"

You are looking at class 3a top ups https://www.gov.uk/state-pension-topup
and not class 3 voluntary contributions https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions