National insurance payments and retirement

Audaxer

C_Mababejive said:

Audaxer said:

C_Mababejive said:

I did read that you only needed 35 ? years for a full state pension. This is clearly inaccurate as im still employed and still paying NI.

I think i am in line for the "new" state pension . My state pension age is 67.

I just had a look at the government state pension forecast page and its currently showing a figure of £9371.27 pa

Thanks all

What does it show on your statement under "Estimate based on your NI record up to 5 April 2021"? If that shows under £179 per week, you may still have to make several years voluntary NI payments to get up to your Forecast amount, even if you have over 40 years of full contributions.

It says £167.86 then on the next line it says

Forecast if you contribute another 3 years before 5 April 2030 £179.60

For each year of voluntary NIs you contribute it currently increases the weekly amount by £5.14, so if you contribute for another 2 years contribution it will take you up to £178.14, which is only £1.36 per week short of the current maximum of £179.60. You should therefore consider whether it is worth paying the final year of contributions for only an extra £1.36 per week, as it will take a lot longer to recover that final year's contribution. 

molerat

C_Mababejive said:

I suspect a lot of pensioners are blissfully unaware that they are about to be made to pay 1.25% of their pension for the new social care levy. I suspect that most people have only heard that there will be a "temporary" increase in NI contributions.

Will the 6/4/2023 social care levy be taken from ALL retirement income ie state and company pension?

And a lot of pensioners are blissfully aware that they won't pay the levy unless they are in employment and only on that employment income in excess of £184 per week.

Audaxer

C_Mababejive said:

Dazed_and_C0nfused said:

unforeseen said:

You stop paying at SPA regardless of whether you are still earning or not. 

But from 6 April 2023 you would start paying the new social care levy if still earning enough to reach the National Insurance thresholds even when you are above SPA.  

You wouldn't pay National Insurance as well, just the new levy (1.25%).

And of course from April ,2022 there is the extra 1.25% added to all the dividend rates (except the nil rate which remains 0%).

I suspect a lot of pensioners are blissfully unaware that they are about to be made to pay 1.25% of their pension for the new social care levy. I suspect that most people have only heard that there will be a "temporary" increase in NI contributions.

Will the 6/4/2023 social care levy be taken from ALL retirement income ie state and company pension?

As far as I can see, the extra 1.25% with only apply to pensioners if you are above State Pension age and still employed. I don't think it affects any pension income, even if you are under State Pension age but retired and in receipt of a DB pension(s).

nigelbb

C_Mababejive said:

Dazed_and_C0nfused said:

unforeseen said:

You stop paying at SPA regardless of whether you are still earning or not. 

But from 6 April 2023 you would start paying the new social care levy if still earning enough to reach the National Insurance thresholds even when you are above SPA.  

You wouldn't pay National Insurance as well, just the new levy (1.25%).

And of course from April ,2022 there is the extra 1.25% added to all the dividend rates (except the nil rate which remains 0%).

I suspect a lot of pensioners are blissfully unaware that they are about to be made to pay 1.25% of their pension for the new social care levy. I suspect that most people have only heard that there will be a "temporary" increase in NI contributions.

Will the 6/4/2023 social care levy be taken from ALL retirement income ie state and company pension?

The social care levy just like regular National Insurance is only levied on earned income. No pensioner who is not still working is going to be affected

Dazed_and_C0nfused

nigelbb said:

C_Mababejive said:

Dazed_and_C0nfused said:

unforeseen said:

You stop paying at SPA regardless of whether you are still earning or not. 

But from 6 April 2023 you would start paying the new social care levy if still earning enough to reach the National Insurance thresholds even when you are above SPA.  

You wouldn't pay National Insurance as well, just the new levy (1.25%).

And of course from April ,2022 there is the extra 1.25% added to all the dividend rates (except the nil rate which remains 0%).

I suspect a lot of pensioners are blissfully unaware that they are about to be made to pay 1.25% of their pension for the new social care levy. I suspect that most people have only heard that there will be a "temporary" increase in NI contributions.

Will the 6/4/2023 social care levy be taken from ALL retirement income ie state and company pension?

The social care levy just like regular National Insurance is only levied on earned income. No pensioner who is not still working is going to be affected

Although indirectly all those, including those over State Pension age, who have dividend income above the dividend nil rate band will be affected as they will pay an extra 1.25% on their divided income.

Nanucleo

Dazed_and_C0nfused said:

I suspect a lot of pensioners are blissfully unaware that they are about to be made to pay 1.25% of their pension for the new social care levy. I suspect that most people have only heard that there will be a "temporary" increase in NI contributions.

There is no 1.25% levy on pension income, it only applies to earnings.

Still confused. Does this levy apply only to earned income above the threshold of circa £9k for pensioners or  on all earned income. In addition does private pension income included

xylophone

https://www.gov.uk/guidance/prepare-for-the-health-and-social-care-levy

C_Mababejive

Dazed_and_C0nfused said:

nigelbb said:

C_Mababejive said:

Dazed_and_C0nfused said:

unforeseen said:

You stop paying at SPA regardless of whether you are still earning or not. 

But from 6 April 2023 you would start paying the new social care levy if still earning enough to reach the National Insurance thresholds even when you are above SPA.  

You wouldn't pay National Insurance as well, just the new levy (1.25%).

And of course from April ,2022 there is the extra 1.25% added to all the dividend rates (except the nil rate which remains 0%).

I suspect a lot of pensioners are blissfully unaware that they are about to be made to pay 1.25% of their pension for the new social care levy. I suspect that most people have only heard that there will be a "temporary" increase in NI contributions.

Will the 6/4/2023 social care levy be taken from ALL retirement income ie state and company pension?

The social care levy just like regular National Insurance is only levied on earned income. No pensioner who is not still working is going to be affected

Although indirectly all those, including those over State Pension age, who have dividend income above the dividend nil rate band will be affected as they will pay an extra 1.25% on their divided income.

I guess people will start to reconsider their positions regarding holding certain investments as the risk/reward landscape will be changed by more taxation ?

Albermarle

C_Mababejive said:

Dazed_and_C0nfused said:

nigelbb said:

C_Mababejive said:

Dazed_and_C0nfused said:

unforeseen said:

You stop paying at SPA regardless of whether you are still earning or not. 

But from 6 April 2023 you would start paying the new social care levy if still earning enough to reach the National Insurance thresholds even when you are above SPA.  

You wouldn't pay National Insurance as well, just the new levy (1.25%).

And of course from April ,2022 there is the extra 1.25% added to all the dividend rates (except the nil rate which remains 0%).

I suspect a lot of pensioners are blissfully unaware that they are about to be made to pay 1.25% of their pension for the new social care levy. I suspect that most people have only heard that there will be a "temporary" increase in NI contributions.

Will the 6/4/2023 social care levy be taken from ALL retirement income ie state and company pension?

The social care levy just like regular National Insurance is only levied on earned income. No pensioner who is not still working is going to be affected

Although indirectly all those, including those over State Pension age, who have dividend income above the dividend nil rate band will be affected as they will pay an extra 1.25% on their divided income.

I guess people will start to reconsider their positions regarding holding certain investments as the risk/reward landscape will be changed by more taxation ?

Most people will hold their investments in a pension  or S&S ISA, so will be unaffected by these changes.