Retiring midway through a qualifying year

rothers

I am retiring in November just short of my 52nd birthday and can get an immediate pension. As I am retiring so young I am still around seven qualifying years short of my full state pension, my question for you knowledgable people is this….

Do you have to have earned £242 per week for EVERY week of the financial year to April or will I gat the stamp for this year because I have already earned well in excess of 52x£242?

I am planning on getting a part time job in the future, I just wondered if this year would count if I didn’t earn any more. 

Thanks for any help. 

Doctor_Who

I retired partway through the tax year (September) and received a full NI qualifying year. The text below is taken from the link below:

A qualifying year is generally a tax year in which an individual has paid or is treated as having paid NIC or was credited with NIC on earnings of at least 52 times the lower earnings limit (LEL). The weekly LEL for the 2023/24 tax year is £123. This means you need to have earned at least £6,396 (for 2023/24), but you need to exclude any week where you earned less than £123. Thus you could satisfy a qualifying year by earning £300 for 25 weeks in the tax year and only earning £100 in total for the other 27 weeks of the year; but you would not satisfy the condition if you earned £300 for 10 weeks and then £100 for the other 42 weeks of the year. 

https://www.litrg.org.uk/tax-guides/pensioners/approaching-retirement#:~:text=not contracted-out.-,What is a qualifying year for the purpose of entitlement,pension) based on those contributions. 

rothers

Doctor_Who said:

I retired partway through the tax year (September) and received a full NI qualifying year. The text below is taken from the link below:

A qualifying year is generally a tax year in which an individual has paid or is treated as having paid NIC or was credited with NIC on earnings of at least 52 times the lower earnings limit (LEL). The weekly LEL for the 2023/24 tax year is £123. This means you need to have earned at least £6,396 (for 2023/24), but you need to exclude any week where you earned less than £123. Thus you could satisfy a qualifying year by earning £300 for 25 weeks in the tax year and only earning £100 in total for the other 27 weeks of the year; but you would not satisfy the condition if you earned £300 for 10 weeks and then £100 for the other 42 weeks of the year. 

https://www.litrg.org.uk/tax-guides/pensioners/approaching-retirement#:~:text=not contracted-out.-,What is a qualifying year for the purpose of entitlement,pension) based on those contributions. 

Thanks for that Doc, another quick question if I may?

it says that you need to earn £242 per week to get a qualifying year but then says that you may get one if you earn the LEL that you mention above (£123/week) Under what circumstances would you get a qualifying year by earning £123/week?

Thanks again

molerat

£242 pw is the point where you start paying NI contributions.  £123 per week, the LEL, is the point where you are credited without contributing, you get a week credit simply by earning £123.  If you earn  52 x the LEL in a part year on pay packets that are above the LEL and ignoring any amounts above the UEL you will get a whole year.

rothers

molerat said:

£242 pw is the point where you start paying NI contributions.  £123 per week, the LEL, is the point where you are credited without contributing, you get a week credit simply by earning £123.  If you earn  52 x the LEL in a part year on pay packets that are above the LEL and ignoring any amounts above the UEL you will get a whole year.

That’s great, thanks for that. 

Doctor_Who

Earning a qualifying year and paying NI are two separate things. You need to earn above the LEL (£123 per week) to gain a qualifying year. If you earn above the Primary Threshold (PT, £242 per week) you start to pay NI. The information in the link I gave above is correct and you can use this to determine whether the year is a qualifying year.

https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions