NI threshold query 23 March 2022 at 2:49PM in Employment, jobseeking & training 13 replies 341 views

helatruralhome

Hello

With the new rise in National insurance threshold how will this affect those who will now not earn enough to pay contributions?

I don't qualify for benefits other than PIP so I am concerned about not earning enough to pay contributions, especially as I can't afford to pay for voluntary contributions either. 

MattMattMattUK

helatruralhome said:

Hello

With the new rise in National insurance threshold how will this affect those who will now not earn enough to pay contributions?

I don't qualify for benefits other than PIP so I am concerned about not earning enough to pay contributions, especially as I can't afford to pay for voluntary contributions either. 

It will not impact them, if they do not already pay NI then they can not pay less NI due to the threshold rising.

helatruralhome

MattMattMattUK said:

helatruralhome said:

Hello

With the new rise in National insurance threshold how will this affect those who will now not earn enough to pay contributions?

I don't qualify for benefits other than PIP so I am concerned about not earning enough to pay contributions, especially as I can't afford to pay for voluntary contributions either. 

It will not impact them, if they do not already pay NI then they can not pay less NI due to the threshold rising.

This is what I am asking- if the threshold is changing so people now no longer pay but were before it how will that effect the NI contributions

helatruralhome

Basically if a person was on the threshold so was paying but because it's now being raised it will mean some will no longer earn enough anymore so how will it effect those workers? 

SiliconChip

I think the query that the OP has relates to the LEL. The announcement today was for a rise to the Primary Threshold, but what is not clear is whether the LEL will rise by £3000 (which would push it from £6,240 - £120 per week - to £9,240) or whether it will stay at £120 pw. If it rises then that means a huge number of low paid people will not benefit from the deemed contribution between LEL and PT so could have contributory benefits removed and may not have state pension qualifying years added. I have asked the same question on the BBCPolitics FB page in the hope that it may be answered there.

MSE_Helen_K

Hi all - we've put this question to HMT and we'll update this story here when we know more: 

https://www.moneysavingexpert.com/news/2022/03/spring-statement-2022-national-insurance-rise-tax-cut-/

Thanks,
MSE Helen 

helatruralhome

SiliconChip said:

I think the query that the OP has relates to the LEL. The announcement today was for a rise to the Primary Threshold, but what is not clear is whether the LEL will rise by £3000 (which would push it from £6,240 - £120 per week - to £9,240) or whether it will stay at £120 pw. If it rises then that means a huge number of low paid people will not benefit from the deemed contribution between LEL and PT so could have contributory benefits removed and may not have state pension qualifying years added. I have asked the same question on the BBCPolitics FB page in the hope that it may be answered there.

Yes this is exactly what I am asking as I am really concerned that it will mean lots of people unable to have NI credit due to no fault of their own and have no way to make it the shortfall😕

MattMattMattUK

helatruralhome said:

SiliconChip said:

I think the query that the OP has relates to the LEL. The announcement today was for a rise to the Primary Threshold, but what is not clear is whether the LEL will rise by £3000 (which would push it from £6,240 - £120 per week - to £9,240) or whether it will stay at £120 pw. If it rises then that means a huge number of low paid people will not benefit from the deemed contribution between LEL and PT so could have contributory benefits removed and may not have state pension qualifying years added. I have asked the same question on the BBCPolitics FB page in the hope that it may be answered there.

Yes this is exactly what I am asking as I am really concerned that it will mean lots of people unable to have NI credit due to no fault of their own and have no way to make it the shortfall😕

Ah ok, that is a little more complicated. Unless there are changes in legislation (which is unlikely) then they would not have a complete National Insurance record. The rate to buy Class 3 NI for those below the compulsory contribution rate is £15.40 per week, which is £800.80 per year. Any entitlements would stay in line with having made the required NI contributions. 

helatruralhome

MattMattMattUK said:

helatruralhome said:

SiliconChip said:

I think the query that the OP has relates to the LEL. The announcement today was for a rise to the Primary Threshold, but what is not clear is whether the LEL will rise by £3000 (which would push it from £6,240 - £120 per week - to £9,240) or whether it will stay at £120 pw. If it rises then that means a huge number of low paid people will not benefit from the deemed contribution between LEL and PT so could have contributory benefits removed and may not have state pension qualifying years added. I have asked the same question on the BBCPolitics FB page in the hope that it may be answered there.

Yes this is exactly what I am asking as I am really concerned that it will mean lots of people unable to have NI credit due to no fault of their own and have no way to make it the shortfall😕

Ah ok, that is a little more complicated. Unless there are changes in legislation (which is unlikely) then they would not have a complete National Insurance record. The rate to buy Class 3 NI for those below the compulsory contribution rate is £15.40 per week, which is £800.80 per year. Any entitlements would stay in line with having made the required NI contributions. 

This is what is worrying as if you earn so little that you can't afford to pay at point of salary how can you afford to pay that much for voluntary contributions

MattMattMattUK

helatruralhome said:

MattMattMattUK said:

helatruralhome said:

SiliconChip said:

I think the query that the OP has relates to the LEL. The announcement today was for a rise to the Primary Threshold, but what is not clear is whether the LEL will rise by £3000 (which would push it from £6,240 - £120 per week - to £9,240) or whether it will stay at £120 pw. If it rises then that means a huge number of low paid people will not benefit from the deemed contribution between LEL and PT so could have contributory benefits removed and may not have state pension qualifying years added. I have asked the same question on the BBCPolitics FB page in the hope that it may be answered there.

Yes this is exactly what I am asking as I am really concerned that it will mean lots of people unable to have NI credit due to no fault of their own and have no way to make it the shortfall😕

Ah ok, that is a little more complicated. Unless there are changes in legislation (which is unlikely) then they would not have a complete National Insurance record. The rate to buy Class 3 NI for those below the compulsory contribution rate is £15.40 per week, which is £800.80 per year. Any entitlements would stay in line with having made the required NI contributions. 

This is what is worrying as if you earn so little that you can't afford to pay at point of salary how can you afford to pay that much for voluntary contributions

Not everyone has a full NI record and many people are already below the threshold, this will increase that number by a few million. For pensions for example if people do not have enough NI years to get the NSP then they get Pension Credit as a top up to the same level anyway, in reality not having a full NI record is not a huge impact and you either earn enough or you do not. 

helatruralhome

But what about statutory sick pay as isn't that tied to the lower threshold?

Many people fall through the benefits loopholes so don't get credits or the earnings to pay for voluntary contributions so this could have a serious impact.