Sole trader pensions

jemmalucy

I'm thinking ahead here as I'm only 23 but I'm currently self-employed so have nothing going into a pension. I've seen people talk about making NI contributions for their pension, could somebody explain how all that works please? :eek:

Like I said, I'm a long way off retirement but I'd like to be prepared.

It's a new business so as of the last tax year I made around £7000 but based on how things are going now I'm looking at making around £24000 for this next tax year.

Though I'm not 100% sure I'll continue and may end up back in full-time employment at some point.

Should I be doing something now to prepare or do you think I'm OK?:rotfl:

jaybeetoo

https://www.gov.uk/self-employed-national-insurance-rates

https://www.gov.uk/new-state-pension/your-national-insurance-record-and-your-state-pension

xylophone

I'm currently self-employed

https://forums.moneysavingexpert.com/discussion/5970213/pensions-for-self-employed

post 3.

https://forums.moneysavingexpert.com/discussion/comment/75049267#Comment_75049267

post 4.

Dazed_and_confused

I've seen people talk about making NI contributions for their pension, could somebody explain how all that works please?

As you are self employed the national insurance is incorporated into your Self Assessment liability

It's a new business so as of the last tax year I made around £7000 but based on how things are going now I'm looking at making around £24000 for this next tax year.

So for 2018:19 you will just have to pay Class 2 National Insurance as your profit is less than the limit to start paying Class 4.

For 2019:20 you would have to pay Class 2 and Class 4.

NB. It is Class 2 which gives you a qualifying year for State Pension purposes.