Should I pay tax when I'm on Pension Credit?

jamesd

If you have enough cash it's not necessary for your wife to remain without a state pension. This is because she's got until 5 April 2025 to buy back any missing national insurance years from 2006 to 2016 and that gets her to at least the ten minimum.

If you can afford it I suggest buying them all even if some are in the disputed child benefit years. But see my later post about benefits before doing this.

You can't buy years when you were receiving the married woman's stamp but it should have been cancelled after two years without NI contributions. The reduced stamp years do not count as state pension years. You should read this description to see if it applies to her: https://www.thisismoney.co.uk/money/pensions/article-12444931/amp/Married-womens-stamp-state-pension.html

https://www.moneysavingexpert.com/savings/voluntary-national-insurance-contributions/

jamesd

[Deleted User] said:

You may also be able to fill in missing years or top up as the result of being contracted out whilst in the TPS. 

@[Deleted User]  it is impossible to buy years to cover years when contracted out of the earnings-related part of the state pension because those years already count. Not realising it's only the earnings bit and not the basic bit you could contract out of isn't uncommon.

The main way to get no state pension credit is to have opted for the married woman's small stamp. That counts for neither part.

QrizB

jamesd said:

If you have enough cash it's not necessary for your wife to remain without a state pension. This is because she's got until 5 April 2025 to buy back any missing national insurance years from 2006 to 2016 and that gets her to at least the ten minimum.
If you can afford it I suggest buying them all even if some are in the disputed child benefit years.

But since they receive Pension Credit, any purchased SP will result in reduced PC on (I think) a £1:£1 basis until the PC is reduced to zero. plus they'll lose all the other PC-linked benefits.
Depending exaclty how much PC they receive, they could end up worse off for buying NI years.

jamesd

dhpeteb a big issue for you two is whether getting more pension for your wife might cause you to lose Pension Credit and become worse off. It's particularly likely if you rent your home and have that paid by benefits.

For this reason I suggest contacting Citizen's Advice for a benefits check. They can advise you whether it is or isn't best to do anything. Do seek information anyway.

Key may be just how many years your wife can get if you buy as many as you can afford and get all of the CB years.