Advice on NI Contributions

mark55man

Hi

My OH (SRA 2030) has down shifted and now has a community based job earning just over £400 gross a month.  There is no chance of additional hours.  As I understand NI (which is slightly,but not completely)  this is not enough to earn a full years contribution, and part years don't count (except possibly to reduce fees to make up the year).

Seeking advice as to the best way to proceed to ensure so that she earns her years contribution - she needs 2 more years for a full entitlement.  The following seem to be options
* Another PAYE job that earns enough to qualify - I understand there are complexities with timing of payments, but assume this would be very part time, but regular.  I also understand we may need to be active in ensuring that the HMRC collates the two jobs 
* Undertake some self employment (tutoring/crafts) and make Class II contributions
* Wait until nearer the time (who knows what might happen) and make some voluntary contributions later

Apologies if this is basic, but struggling to pin it all together
Cheers

Marcon

If she reaches SPA in 2030, there is scope to pay the 'missing' two years for some time yet. Maybe wait and see what happens between now and then?

mark55man

I do agree, I just didn't want to time out on the last few years - if they would be cheaper/better

Marcon

I think it's the old phrase 'your guess....'. 

https://www.gov.uk/voluntary-national-insurance-contributions/deadlines

mark55man

OK - maybe I did understand it then, I was anticipating that there was a more scientific approach I was missing.  So I will just find out what it would cost now then take a stab educated guess whether its better to do it now or later.  

badmemory

Are you sure that HMRC collate the 2 jobs?  I am not so sure.  NI does not work like income tax.

mark55man

Hi thanks - no I'm not sure.  I read another thread that suggested it could, but I was hoping for a little education

nigelbb

badmemory said:

Are you sure that HMRC collate the 2 jobs?  I am not so sure.  NI does not work like income tax.

HMRC do not collate 2 jobs & NI is based on weekly income. I know this from when I had a well paid full time job so was only paying 2% NI contributions on my income above £962/week. I did some extra shifts with another employer & had to write to HMRC to explain the situation so that I got charged 2% NI for my extra shifts not 12%. 

mark55man

So I think I learn from the posts above that it doesn't happen automatically, but that if my OH did two jobs, then

* she wouldn't end up with 2 jobs of which neither crossed the threshold and therefore didn't count for a full year
* but she would have to write to HMRC (or do a self assessment??) to join it up and get the qualifying year

EDITED TO ADD - This is WRONG - see below - if you don't pass the Lower Earning Limit in 1 job you don't get the contribution"
Thanks again

mark55man

So thanks to this thread I have done some more research, and found this
https://www.litrg.org.uk/sites/default/files/Multiple%20jobholding%202018-19.pdf

Very clearly if you have two jobs they each have a separate limit (unless 2 jobs with the same employer) and therefore you earn no entitlement, which somewhat sucks.  From the above site which seems credible

"If you do not earn at least the Lower Earnings Limit in any one job (£118 in 2019/20), you will not get any NIC credits. If this is the case and you do not get credits for any other reason (e.g. because you are claiming child benefit) you may want to consider making Class 3 voluntary NIC payments to help protect your contributions record. "