Why is this not a qualifying year?

Phargus

I did some work for my employer in 2021/2 who pays weekly.  In Dec 21 I was paid ~£3,250 and the NI sum paid was  (£967-£184) * 12% + (£3250-£967) * 2%  = £139.62, where £967 and £184 were the upper and primary thresholds respectively in 2021/22.  In March 2022 I was paid the same amount and paid the same NIC.  The only other payslip I got all year was in Feb 2022 and that had no pay, tax or NI but just had the repayment of ~£30 NEST contribution which I had opted out of.  So as I understand, with earnings of £6,500, I was paid over the Lower Earnings Limit of £6240 for the year and paid NIC each time I received work income.  
My NI record was showing this as an incomplete year and when I wrote to HMRC, they have just replied saying it is not a full year and that there are 12 weeks NIC recorded.  They have not explained their workings.  I plan to seek clarification but maybe someone knows an extra rule that I haven't found to explain why HMRC are correct and this is a non-qualifying year? 
If they are correct I will top up as I still need 3 years to get max pension and don't expect to do any more work - I am now retired.
Many thanks if anyone can help explain.

af1963

My understanding is the same as yours, and this article seems to agree:

https://www.thisismoney.co.uk/money/pensions/article-7873583/How-qualifying-years-state-pension-worked-out.html

NedS

Phargus said:

I did some work for my employer in 2021/2 who pays weekly.  In Dec 21 I was paid ~£3,250 and the NI sum paid was  (£967-£184) * 12% + (£3250-£967) * 2%  = £139.62, where £967 and £184 were the upper and primary thresholds respectively in 2021/22.  In March 2022 I was paid the same amount and paid the same NIC.  The only other payslip I got all year was in Feb 2022 and that had no pay, tax or NI but just had the repayment of ~£30 NEST contribution which I had opted out of.  So as I understand, with earnings of £6,500, I was paid over the Lower Earnings Limit of £6240 for the year and paid NIC each time I received work income.  
My NI record was showing this as an incomplete year and when I wrote to HMRC, they have just replied saying it is not a full year and that there are 12 weeks NIC recorded.  They have not explained their workings.  I plan to seek clarification but maybe someone knows an extra rule that I haven't found to explain why HMRC are correct and this is a non-qualifying year? 
If they are correct I will top up as I still need 3 years to get max pension and don't expect to do any more work - I am now retired.
Many thanks if anyone can help explain.

How many weeks did you work?

You have told us your employer pays weekly. You have stated how much you earned in the months of Dec 21 and Mar 22, but you have not stated how many weeks you worked in those months (your calcs above imply it was 1 paid week of work)

As you stated, the weekly UEL threshold was £967. My understanding is that any weekly earnings above the UEL are not counted. My interpretation is that if your Dec 21 earnings were for a single week of work, only £967 of that £3,250 pay count towards your annual LEL of £6240.

Same with March 2022 - how many weeks did you work? Again, if you were only paid for 1 week of work, then only £967 counts, so you have 2 x £967 = £1934 of considered earnings in the year from the two weeks of paid work. This is less than the annual LEL of £6240 so the year does not count.

Had the same employer paid you the same amounts monthly, then the year would have counted, but you would have paid more NI in the process as you would have paid at 12% on the full amount about the LEL, rather than the reduced 2% rate you paid for the majority of your earnings above the UEL.

zagfles

af1963 said:

My understanding is the same as yours, and this article seems to agree:

https://www.thisismoney.co.uk/money/pensions/article-7873583/How-qualifying-years-state-pension-worked-out.html

He should have mentioned that earnings above the UEL don't count. But the question in that article was for someone relatively low paid so wasn't relevant in that case.

Marcon

Good explanation (and a lot of other helpful info) here: https://www.litrg.org.uk/tax-guides/pensioners/approaching-retirement

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What is a qualifying year for the purpose of entitlement to state pension?

Phargus

NedS, many thanks. Have read a fair bit but never came across that earnings above UEL were discounted - I suppose there is a clue in the name. Yes I was only paid for 1 week in each month. Bit of a bummer as I could have arranged for payments to be more phased but hey, ho you live and learn.  Thanks again for the reply and explanation, at least it will save me money on a stamp to seek clarification from them!

NedS

Phargus said:

NedS, many thanks. Have read a fair bit but never came across that earnings above UEL were discounted - I suppose there is a clue in the name. Yes I was only paid for 1 week in each month. Bit of a bummer as I could have arranged for payments to be more phased but hey, ho you live and learn.  Thanks again for the reply and explanation, at least it will save me money on a stamp to seek clarification from them!

I'm not sure how they calculate how much it costs to top up a year, but when you come to buy your missing years, it may be that year (2021/22) is cheaper to buy than if you had made no contributions at all, so it may not be a compete loss.

molerat

NedS said:

Phargus said:

NedS, many thanks. Have read a fair bit but never came across that earnings above UEL were discounted - I suppose there is a clue in the name. Yes I was only paid for 1 week in each month. Bit of a bummer as I could have arranged for payments to be more phased but hey, ho you live and learn.  Thanks again for the reply and explanation, at least it will save me money on a stamp to seek clarification from them!

I'm not sure how they calculate how much it costs to top up a year, but when you come to buy your missing years, it may be that year (2021/22) is cheaper to buy than if you had made no contributions at all, so it may not be a compete loss.

Phargus said:

I wrote to HMRC, they have just replied saying it is not a full year and that there are 12 weeks NIC recorded. 

So it will cost 40 weeks which is £616

zagfles

molerat said:

NedS said:

Phargus said:

NedS, many thanks. Have read a fair bit but never came across that earnings above UEL were discounted - I suppose there is a clue in the name. Yes I was only paid for 1 week in each month. Bit of a bummer as I could have arranged for payments to be more phased but hey, ho you live and learn.  Thanks again for the reply and explanation, at least it will save me money on a stamp to seek clarification from them!

I'm not sure how they calculate how much it costs to top up a year, but when you come to buy your missing years, it may be that year (2021/22) is cheaper to buy than if you had made no contributions at all, so it may not be a compete loss.

Phargus said:

I wrote to HMRC, they have just replied saying it is not a full year and that there are 12 weeks NIC recorded. 

So it will cost 40 weeks which is £616

Surprised it's 12, if OP earned over UEL for 2 weeks that should be 16 weeks ie 967*2/120, so should only have to pay 36 weeks ie £554.40

OP - what does it say on your NI record, it should say how much you'd have to pay to make the year up.