self employed, drawing pension and Class 2 NICs

skycatcher

Good Morning,

My wife and I have a partnership business in which I have a minor role and take a small share of the profit less than £100. She would take arounf £9000. I also am drawing a DB pension. My question is do I need to voluntarily pay Class 2 NIC (as I need another 3 years for full state pension) or will i be credited as the income is low (thought the DB is well above the Low earnings threshold).

I hope that makes sense!

Thanks

Dazed_and_C0nfused

Why would you think you would get any credits?

skycatcher

I thought if your earnings were below a certain threshold you were exempt from paying NICs and you would get credited toward your state pension? If I've misunderstood that then my bad. I wasn't sure if pension payments were classed as earnings in this sense.

Dazed_and_C0nfused

I think you are maybe mixing up being employed, which you don't mention, and self employment.

Pension income doesn't attract NI.  Although from April 2023 it will be liable to the new Social Care Levy (subject to exceeding the relevant threshold).

AIUI providing you remain self employed (in partnership) and complete Self Assessment returns then you will be eligible to pay voluntary Class 2 NI.  Which is very hard to beat in terms on an investment if it gains the maximum £5.29/week extra state Pension.

Be careful about the third year as you personally cannot exceed £185.15/week so if two extra years take you to say £185.00/week then a third year only buys you £0.15p/week.

Dazed_and_C0nfused

molerat said:

Dazed_and_C0nfused said:

Pension income doesn't attract NI.  Although from April 2023 it will be liable to the new Social Care Levy (subject to exceeding the relevant threshold).

Pension income will not be subject to the levy. Only employment income for those past state pension age will be affected.

https://www.gov.uk/guidance/prepare-for-the-health-and-social-care-levy#how-the-levy-will-affect-you

Thanks, age is catching up with me 😢

Was meant to say pensioners will be liable if they have earnings (or profits) above the relevant threshold.

skycatcher

Thanks, I now unerstand. I have been paying voluntary Class 2 for many years but got momentary confused after reading some other website! I am happy to continue paying as it is great value but will watchout for that final year - thanks for that warning Dazed!