Nat Ins: will I get a state pension qualifying year based on my employed earnings in t/yr 2022-23?

UJan99

Hi, please can anyone help (I have tried to work out the answer from various sites and by contacting the Nat Ins helpline, but remain unsure and it's not possible to get through on the helpline...).

I am 56 years old. In tax year 2022/23 my only income will be £7,969 (gross) from a job (i.e. from an employment) that lasted from 28/11/22 - 31/1/23 (incl.) (i.e. 9.28 - odd weeks). I paid employee's N.I. (Class 1 (?)) on my earnings from that job.

My question is whether, on that basis, tax year 2022-23 will be an N.I. "qualifying year" for the purpose of counting towards my "new" state pension entitlement?

I THINK the answer is "yes" - because in tax year 2022/23 my gross salary (£7,969) will be above the current tax year LEL of £6,396, but I am not clear if I am right.

Please can anyone clarify - many thanks in advance.

Regards

xylophone

https://www.litrg.org.uk/tax-guides/students/going-abroad/national-insurance#:~:text=The 2022/23 tax year,not count towards the total.

A ‘qualifying year’ sounds as though you might need to have 52 weeks of working for it to count. In fact, for Class 1 NICs (those payable by employees), any tax year where you receive a minimum amount of earnings or credits (which you receive for example, if you cannot work because you are bringing up children who are aged under 12) can be a qualifying year. The 2022/23 tax year could be ‘banked’ as a qualifying year provided you have earned the equivalent of 52 x £123 (this amount is the weekly Lower Earnings Limit) – total £6,396. Please note that any pay periods in which you have earned under the Lower Earnings Limit will not count towards the total.

You could also make up a qualifying year for 2022/23 by, say, earning £123 for 40 weeks and then receiving NIC credits for the other 12 weeks.

zagfles

xylophone said:

https://www.litrg.org.uk/tax-guides/students/going-abroad/national-insurance#:~:text=The 2022/23 tax year,not count towards the total.

A ‘qualifying year’ sounds as though you might need to have 52 weeks of working for it to count. In fact, for Class 1 NICs (those payable by employees), any tax year where you receive a minimum amount of earnings or credits (which you receive for example, if you cannot work because you are bringing up children who are aged under 12) can be a qualifying year. The 2022/23 tax year could be ‘banked’ as a qualifying year provided you have earned the equivalent of 52 x £123 (this amount is the weekly Lower Earnings Limit) – total £6,396. Please note that any pay periods in which you have earned under the Lower Earnings Limit will not count towards the total.

You could also make up a qualifying year for 2022/23 by, say, earning £123 for 40 weeks and then receiving NIC credits for the other 12 weeks.

I don't think that's completely right as earnings about the UEL don't count.

OP - what was your pay period? Monthly, weekly, 4-weekly? How much did you earn in each pay period? How much NI did you pay?

xylophone

as earnings about the UEL don't count.

Above?

Long discussion with all technicalities here

https://forums.moneysavingexpert.com/discussion/5495808/complete-qualifying-national-insurance-years

including link to your post here

https://forums.moneysavingexpert.com/discussion/comment/71234294/#Comment_71234294

UJan99

Many thanks indeed both. As a first step I'll read that discussion.

Regards

UJan99

I’ve now had a look at the other thread and specific post you very helpfully pointed to.

My pay period was monthly.

In December 2022 I was paid £4,269 gross. £3,700 of that was for month of December, the rest was for 28-30 November. In January 2023 I was paid £3,700 gross (for month of January).

Employee’s N.I. of £378.52 and £318.24, respectively, was deducted.

I note the monthly LEL for tax year 2022/23 is £533 and monthly UEL £4,189.

From the above, and if I have correctly understood what’s on the other thread and the info you’ve kindly provided here, I think that means what I’ll call my “qualifying gross” earnings for deciding if tax year 2022/23 is a “qualifying year” for N.I. purposes will be 2 x £3,700 = £7,400; that, in turn will mean t/yr 2022/23 is indeed a qualifying year (because £7,400 is more than the annual LEL for the current t/yr - of £6,396).

I’d be very grateful if you could tell me if you think I’m right. Your time is appreciated.

Regards

molerat

Looking at the NI deducted in December it was based on the whole amount being earned in December so £4189 counts.  They maybe should have split the pay for NI purposes meaning you would have only paid £318.24.

zagfles

UJan99 said:

I’ve now had a look at the other thread and specific post you very helpfully pointed to.

My pay period was monthly.

In December 2022 I was paid £4,269 gross. £3,700 of that was for month of December, the rest was for 28-30 November. In January 2023 I was paid £3,700 gross (for month of January).

Employee’s N.I. of £378.52 and £318.24, respectively, was deducted.

I note the monthly LEL for tax year 2022/23 is £533 and monthly UEL £4,189.

From the above, and if I have correctly understood what’s on the other thread and the info you’ve kindly provided here, I think that means what I’ll call my “qualifying gross” earnings for deciding if tax year 2022/23 is a “qualifying year” for N.I. purposes will be 2 x £3,700 = £7,400; that, in turn will mean t/yr 2022/23 is indeed a qualifying year (because £7,400 is more than the annual LEL for the current t/yr - of £6,396).

I’d be very grateful if you could tell me if you think I’m right. Your time is appreciated.

Regards

Yes. Not that it matters but your qualifying earnings are 4189 + 3700 which is even further above the annual LEL.

UJan99

Thank you zagfles and molerat - much appreciated.

Regards