Working part year and NI 'years'

marlot

I'm thinking of retiring early sometime next tax year. I've received my state pension forecast, and could do with a few more years of contributions.

If I'm on (say) £50k, do I have to work the full year to get the additional year credited to my state pension, or can I get the credit after a few months?

Thanks!

mlb1984

No, you don't necessarily have to be in work for the entire tax year. I worked for less than half of one tax year and it appears on my record as a year towards my pension. I don't know on what basis they decide whether it counts though.

greenglide

If earnings for a single employment in the year are greater than the NI lower earnings limit - £5,824 - then it is a qualifying year. It makes no difference whether this is in one week or 52 weeks.

This figure is below the primary threshold - £8,060 (£155 per week) - at which you actually pay NI so you can get a qualifying year without paying NI!

Wurly

I hope OP doesn't mind me jumping in here as this is a question i have been wondering for a while.

I am going to end up working part of the tax year (2017-2018) retiring somewhere inbetween. I am maxing avc's to my pension, so will need a full years contributions reach the lower amount.
I also would like to add another qualifying year (or two) but also thought you needed a full years contribution over 52 weeks.
Is it possible to buy missing part years or pay up the shortfall?

I'm just wondering if it might pay me to stop the avc's before April or carry on?

mjsmike

Hi greenglide
So does this mean that someone earning say £3000 per month and needing just 1 more year NI for full state pension. Only needs to work for 2 months to get the full state pension? This is good news if correct

xylophone

http://www.taxguideforstudents.org.uk/going-abroad/national-insurance


A qualifying year sounds as though you might need to have a perfect 52 weeks of working for it to count. In fact, any tax year where you receive a minimum amount of earnings or credits (which you receive, for example, if you cannot work because you are bringing up children who are aged under 12) can be a qualifying year. The 2016/17 tax year could be ‘banked’ as a qualifying year provided you have earned the equivalent of 52 x £112 (this amount is known as the Lower Earnings Limit) – total £5,824. Please note that any pay periods in which you have earned under the Lower Earnings Limit will not count towards the total.

Depending on whether you are working at the same time as studying, you may already have a couple of qualifying years under your belt.

mjsmike

Hi Marlot

Has your question been answered?. I am in similar situation

marlot

mjsmike wrote: »

Hi Marlot

Has your question been answered?. I am in similar situation

Kindly answered by MLB and Greenglide above.

Is there any aspect of their answers which confuse you, because they seem clear to me.

mjsmike

Kindly answered by MLB and Greenglide above.

Is there any aspect of their answers which confuse you, because they seem clear to me.

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Many thanks for the clarification Marlot. I got a bit confused with the post and link from xylophone but reading it again, he is also saying the same. It just appeared too good to be true[/FONT]

madeinireland_2

Hi - I have a related question on this subject which I'm hoping someone can answer.

I hope to retire soon and it's shaping up to be the end of April. I will get a redundancy payment and the first £30k will be tax free.

I have the option to spread that payment over 3 years and I would obviously take at least £30k is the first year. If I have £18k left and spread the remainder over 3 years does this mean I would effectively add 3 years to my state pension?

I'm about 4 years short of a full pension at the moment.

Thanks...

jamesd

Probably better for you to take it all in the first year and use that taxable gross for pension contributions. Then you can get at least 25% of it tax free. That will save you more than the cost of buying years.

Sorry, I don't know how splitting it would affect things but it would probably depend on it being classed as pay and it seems unlikely that it will be. Your employer should be able to clarify.