Advice needed on how to plan for future pension when not paying national insurance

julesmlock

I am looking for advice regarding state pension for my daughter who is 23 years old. She is blind and has end stage kidney failure and she has just been listed on the kidney transplant list.

She has received DLA up until she was sixteen and since then has received the care component of Personal Independence Payment and a car through the Motability scheme instead of the Mobility component cash payment. Since leaving school in the summer of 2019 she has never been employed because of health and disability issues and from Dec 2020 until October 2021 she claimed Universal Credit. She received an inheritance of just over £41,000.00 in October 2021 so she declared it and her claim for universal credit was closed and she has been living off the inheritance and her monthly PIP payment since then.

I am concerned about how this will all affect my daughter's future claim to a state pension (if it still exists by then) and am looking for advice on if there is anything that we should be thinking about or putting in place now.

Any guidance you may be able to give will be very much appreciated by us both.

 

Grumpy_chap

If you don't receive suitable responses from this thread, it might be worth asking in the Benefits area of the forum.

JoeCrystal

Your daughter can make a voluntary contribution to get NI credited. Class 3, I believe.  https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions#class-3-national-insurance-voluntary

Now, as she had received Universal Credit in the past, she may have got some partly credited to a year or two aka (20/21 and 21/22). All I can say is that the NI record should be checked, and certainly, there should be no issue with paying for Class 3 voluntary contribution (if not already given by other benefits).

In fact (I did some quick googling), you can set up Direct Debit to make voluntary Class 3 National Insurance contributions for the current tax year.

https://www.gov.uk/pay-voluntary-class-3-national-insurance/direct-debit

Keep_pedalling

I can’t help with your question, but while you are planning for her future, if you have not already done so, you should make sure you have appropriate wills in place that cater for your daughter’s needs. It is likely that it would be better to provide her inheritance in the form of a vulnerable persons trust rather than an absolute gift. This would preserve any benefits she receives at the time.

https://www.gov.uk/trusts-taxes/trusts-for-vulnerable-people

LHW99

I would second the suggestion to post on the Benefits board. 

There is some (tenuous) suggestion that the new ESA also provides credits (https://www.gov.uk/employment-support-allowance/eligibility) if disabled, which may be something to look into in the future.

itsthelittlethings

I think you can make a claim for ESA to get NI credits. She would get no payment because of her capital, but would get NI towards her state pension.

molerat

I think the problem for ESA eligibility will be

You also need to have both:

• worked as an employee or have been self-employed
• paid enough National Insurance contributions, usually in the last 2 to 3 years - National Insurance credits also count

https://www.gov.uk/employment-support-allowance/eligibility

LHW99

She should though probably be entitled to pension credit in due course (or similar benefit at that time I imagine) if she has only a low level of SP

Marcon

I'm sorry your daughter (and her family) have been dealt such a rough hand.

I don't think anything has changed since you asked this in December: https://forums.moneysavingexpert.com/discussion/6493253/future-eligibility-to-state-pension#latest

Probably worth revisiting once the results of the general election are known, especially if we have a change of government.

Also probably worth contacting relevant charities who are likely to have useful information.

8dayweek

molerat said:

I think the problem for ESA eligibility will be

You also need to have both:

• worked as an employee or have been self-employed
• paid enough National Insurance contributions, usually in the last 2 to 3 years - National Insurance credits also count

https://www.gov.uk/employment-support-allowance/eligibility

This would be the eligibility to get the physical New Style ESA payments. 

If you don’t qualify for the physical payments you’d just switch to ESA NI Credits only claim (the only time this doesn’t happen is when there is a dual claim with another income-related benefit, as the IR benefit would provide the NI credit in that scenario). 

Bigwheels1111

If claiming another benefit other than Dla, PiP.
Her Ni should be paid.
If not a cheaper way round this is to register as self employed.
Then you only pay £13 ish a month for Ni contributions.
Make bangles and bracelets, sell on eBay for eg.

If less than £500 profit is made you don’t even need to register.
But she would benefit from being registered.
Pay off all debts and bill in full, get below £16k or £6k and re claim UC.
Paying off debts and bills is not deprivation of capital.