Self-employed NI contributions and state pension

Lindylou36

Hi, I'm hoping that someone can provide clarity on the following please.

I worked full-time up until December 2021 and paid NI through PAYE.  My pension forecast on HMRC indicates that I can claim my pension in July 2026, and it will be the full amount of £230.25 per week.  It states that I cannot improve my forecast any more.

When I finished my full-time employment in December 2021, I started working as a self-employed examiner, and my tax is deducted at source.   When I first started this role, I contacted HMRC to enquire if I should continue to pay NI, and was advised that, as I already had enough qualifying years to receive my full pension, I did not need to continue paying NI contributions - I took their advice and haven't paid NI since December 2021. 

However, I've recently read posts on other forums that indicate I should have continued to pay NI, and I'm now a bit concerned that it may have a detrimental effect on my pension. I’m worried about contacting HMRC in case they say that I need to pay NI contributions for the time I have been self-employed.

Any advice would be gratefully received.

Many thanks in advance!

Marcon

Lindylou36 said:

Hi, I'm hoping that someone can provide clarity on the following please.

I worked full-time up until December 2021 and paid NI through PAYE.  My pension forecast on HMRC indicates that I can claim my pension in July 2026, and it will be the full amount of £230.25 per week.  It states that I cannot improve my forecast any more.

So paying further NI wouldn't increase your state pension.

Lindylou36 said:

When I finished my full-time employment in December 2021, I started working as a self-employed examiner, and my tax is deducted at source.   When I first started this role, I contacted HMRC to enquire if I should continue to pay NI, and was advised that, as I already had enough qualifying years to receive my full pension, I did not need to continue paying NI contributions - I took their advice and haven't paid NI since December 2021. 

However, I've recently read posts on other forums that indicate I should have continued to pay NI, and I'm now a bit concerned that it may have a detrimental effect on my pension. I’m worried about contacting HMRC in case they say that I need to pay NI contributions for the time I have been self-employed.

Any advice would be gratefully received.

Many thanks in advance!

Even if someone has paid sufficient years of NI contributions to qualify for a full state pension, they would still need to pay NI up until state pension age if their earnings are at a level where NI would be payable.  

If your earnings weren't high enough to require you to pay NI, then you don't need to pay NI on them - and given your state pension forecast 'can't be improved any more', there's no need to worry about it.

Secret2ndAccount

You do not need to pay voluntary Class 2 NI contributions, since it won't improve your pension.
A self employed person with profits of more than £12,570 is required to pay NI (Class 4) of 6% on profits from £12,570 to £50,270
If you earn between £6,845 and £12,570 you get credited with the year's Class 2 for free, although it doesn't much matter in your case.
So if your earnings as an examiner are minimal, you probably don't owe anything.

dunstonh

However, I've recently read posts on other forums that indicate I should have continued to pay NI, and I'm now a bit concerned that it may have a detrimental effect on my pension. I’m worried about contacting HMRC in case they say that I need to pay NI contributions for the time I have been self-employed.

The answer is specfic to the scenario and exactly how the question was asked.  The Gov website is clear on what does or does not need to be paid on the vairious scenarios.

Self-employed National Insurance rates - GOV.UK