Earning NI Qualifying years - working part of the year

zagfles

xylophone wrote: »

See https://www.thisismoney.co.uk/money/pensions/article-7873583/How-qualifying-years-state-pension-worked-out.html

Something missing from Steve Webb's explaination, and which explains the PP's example of a one off £40k payment not making a qualifying year, is that any earnings above the UEL (upper earnings limit) don't count.

NI works on a pay period basis, the thresholds are here for weekly and monthly pay:
https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions
You need to look at each payslip in the tax year and add the total NI'able pay, ignoring completely any period under the LEL, and ignoring any pay over the UEL in that period.
NI'able pay is generally gross pay but is reduced by any salary sacrifice you make (eg for pensions, benefits etc), this applies even if the benefits are taxable.

If that comes to over 52x the weekly LEL, it's a qualifying year.

xylophone

And see post 18.

zagfles

xylophone wrote: »

And see post 18.

Except that doesn't account for periods below the LEL, which don't count at all.

zagfles

Suzzi59 wrote: »

Xylophone you have been most helpful I quoted this article to HMRC and they totally refused what was quoted in the article. I have no confidence in HMRC call centre.

Basically my gross monthly salary is £2141 I
Am I correct in assuming that I only need to work three months in the next financial year 20/21 to meet the requirements for a qualifying year or am I missing something. The article mentioned a primary threshold however I’m not sure if this applies to me?

It's quite close, you'll have to wait till the 2020/21 rates are announced, probably in the March budget.

Suzzi59

Fagfles, I assume I’m on the right track then. March is cutting it fine for me but I’ll probably wait. I have to give 4 months notice I’m looking at finishing 10th July 2020 :j

zagfles

Suzzi59 wrote: »

Fagfles, I assume I’m on the right track then. March is cutting it fine for me but I’ll probably wait. I have to give 4 months notice I’m looking at finishing 10th July 2020 :j

Budget is 11th March. You'll probably be OK, I doubt the LEL will go up over 4% which it'd need to do to keep you under the qualifying level. Plus your final pay will probably count, especially if you get accrued holiday pay etc in your final salary.

Assuming the £2141 is after any salary sacrifice is taken off.

Suzzi59

Thank you, that’s most helpful. Fingers crossed 🤞