No pension, no NI

maltazar

I just found out that my new employer doesn't pay any pension.
I also work only 12 hours a week, meaning I don't pay any NI.
What is the best option? Pay the voluntary NI of £741 this year? Or paying the same ammount into private savings?
I understand that it obviously depends on how you place the money, but in general, which would be best?

thank you

xylophone

.
You are not entitled to NI credits?

http://www.litrg.org.uk/tax-guides/tax-basics/what-national-insurance

How old are you and how much do you earn?

Have you checked your state pension situation?


https://www.gov.uk/check-state-pension

Do you have any pensions from previous employments?

https://www.gov.uk/workplace-pensions/joining-a-workplace-pension

Even if your employer does not have to automatically enrol you, you could still join the scheme but if you do not earn enough to pay tax, check on whether the scheme is "net pay" or "relief at source".

maltazar

I'm not paying any since my salary is too low.
I'm 33 and at the moment I would earn a bit over £5000 a year.

I have pension from previous work and the state from Sweden, but it's going to be around £300 a month.

marlot

maltazar wrote: »

I'm not paying any since my salary is too low.
I'm 33 and at the moment I would earn a bit over £5000 a year. ...

If you could get a few additional hours from your employer, so you earn £5880 a year you don’t pay NI but get the benefits of paying

https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions

Due to the way it works, all the £5880 has to be with the same employer.

molerat

marlot wrote: »

If you could get a few additional hours from your employer, so you earn £5880 a year you don’t pay NI but get the benefits of paying

https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions

Due to the way it works, all the £5880 has to be with the same employer.

But each pay period that contributes to the £5876 must be over the LEL so not as easy as it sounds, the extra would have to be very regular for it to work. The rules are more aimed at irregular workers earning larger amounts.

greenglide

No.

The requirement is that the earnings for the year, for that employment, is over £5,880.

It can vary during the year and it is quite possible to get a qualifying year and pay not NI if each pay period is below the earnings threshold.

Although HMRC now get individual payment details this is quite recent and is not used to calculate NI qualification.

Esox

greenglide wrote: »

No.

The requirement is that the earnings for the year, for that employment, is over £5,880.

It can vary during the year and it is quite possible to get a qualifying year and pay not NI if each pay period is below the earnings threshold.

Although HMRC now get individual payment details this is quite recent and is not used to calculate NI qualification.

Hi, how does that work if you are weekly paid?

For example, I have exceeded the Lower Earnings Limit threshold (£113) for only 14 of the 23 PAYE weeks that have so far elapsed this FY (17/18).

Although my yearly earnings are likely to exceed the quoted annual figure (£5,880).

All with same employer.

xylophone

Hi, how does that work if you are weekly paid?

http://www.litrg.org.uk/tax-guides/employed/what-national-insurance-do-i-pay-employee

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/607128/your-state-pension-explained-apr-2017.pdf

Esox

Thanks (Xylophone) but I was thinking more from a nSP point of view.

Is the HMRC system so sophisticated that it can look at individual weeks when determining NICs required/paid towards nSP entitlement (or only the annual amount)?

For example, as a weekly wage earner, assuming you have exceeded the LEL threshold for only 14 out of 52 weeks, does this get you entitlement to 14/52 of an annual nSP NIC requirement (i.e., you then have to pay HMRC 38/52 x £700(?) to gain a full year's worth of nSP entitlement)?

It may be the case that HMRC haven't got the wherewithal to look much beyond the £5,880 annual earnings figure.

xylophone

https://forums.moneysavingexpert.com/discussion/5586387

greenglide

It may be the case that HMRC haven't got the wherewithal to look much beyond the £5,880 annual earnings figure.

HMRC take the figures they are supplied with at the year end, basically what is on the P60.

If your earnings are over £5,880 (ignoring if you earn over the upper earnings limit in a pay period) then it is a qualifying year.

HMRC cannot do anything else as that is the rules laid down in legislation.