New State Pension Forecast

Triumph13

tamste wrote: »

OK.
So when I take my pension in 2020, I will still need to make NI contributions to get the maximum state pension.

I intend to go self employed after taking my pension in 2020 and was intending to take payments as dividend from the Ltd company, with no salary. In this case would it be possible to make the required NI contributions to ensure that I maximise the state pension when this becomes payable, at which time I might not be working much so would value the maximum state pension.

If you pay yourself between £116 and £162 a week from the limited company you can get your NI stamp without actually paying any NI...

Bimbly

triplea35 wrote: »

I understand that as self employed you only need to make the minimum Class 2 contributions (£153.40 a year) to qualify for State Pension.

But the OP won't be self employed, they will be a director of a limited company.

From what I understand, they can either pay themselves a salary from the business high enough to get NI credits (they are planning no salary so this way would unlikely be tax efficient) or voluntary class 3 contributions. I'm by no means an expert in this area, but I believe this is the case.

Brynsam

tamste wrote: »

I intend to go self employed after taking my pension in 2020 and was intending to take payments as dividend from the Ltd company, with no salary.

You'll be an employee of your company, not self employed, otherwise why bother to set up a company?

Why no salary - what's the logic of that? You can pay yourself a salary which is high enough to trigger an NI credit for the year but not high enough to trigger any actual requirement to pay NI, taking the rest in dividends.

DairyQueen

Brynsam wrote: »

You'll be an employee of your company, not self employed, otherwise why bother to set up a company?

Why no salary - what's the logic of that? You can pay yourself a salary which is high enough to trigger an NI credit for the year but not high enough to trigger any actual requirement to pay NI, taking the rest in dividends.

Exactly so, but OP, either you or your accountant need to run payroll for your company. HMRC aren't psychic so, even though you will be the only company employee and no income tax or NI payment will be due from you, this is the only way to ensure that you receive the NI credit on your record.

Just been around this loop as OH has recently become a fee-earner via our limited company. Class 3 (voluntary) contributions cost several hundred per year so it's generally worth the overhead of running payroll.

tamste

Was planning to set company up with my wife, who also needs a couple of years to get the full state pension.

If I pay a salary to us both of say £150/week, how does this fit with the minimum wage?

Also, how much should I expect to pay an accountant with & without PAYE? Never done this before, so not much idea as to what these costs might be.

p00hsticks

tamste wrote: »

Was planning to set company up with my wife, who also needs a couple of years to get the full state pension.

If I pay a salary to us both of say £150/week, how does this fit with the minimum wage? My wife will unlikely pay any tax even when her pensions are added in, but I will be at the upper end of the 20% bracket with pension included. Also, how much should I expect to pay an accountant with & without PAYE? Never done this before, so not much idea as to what these costs might be.

You're getting away from the topic of pensions now and into questions about running a company - you may be better asking over on the small business board.


https://forums.moneysavingexpert.com/forumdisplay.php?f=27


Minimum wage is not applicable to company directors.

If the company is going to pay a salary to your wife HMRC may want to see that she is actually doing work commesurate with those earnings, and it's not simply being used as an effort to evade tax.