National Insurance Pension contributions

Auntie_Vi

Hi, I have been told that I do not need to make any further contributions to national insurance for state pension as paid 22 years and "home responsibilities" top up will make my state pension up to cover the 30 years needed. I fall into the age group which will retire after 2010 and am now outside the UK as far as NI contributions go (but not for tax!)

It was interesting to hear that if you are in the UK system normally (I am not) a working women needing 30 years if retiring after 2010 and say starting work at 18 would infact pay 47 years that is if she had no time out covered by "HR" (no children in otherwords) or even if she did; would pay more than the 30 years and cannot stop paying once sufficent years are covered. My question is who benefits from the money paid for the difference in years i.e. 17 years (no HR top up), as no over payment is refunded and is not put towards own state pension? Have I misunderstood this please? Auntie Vi

Ian_W

When National Insurance was established in 1947 it was intended that employers and employees shared the costs of 3 cornerstones of the welfare state:
1. State retirement pension
2. A free at the point of use National Health Service
3. A non-means tested unemployment benefit system.
No specific pension fund was set up and contributions were and still are used to pay the pensions of those currently in retirement, they're not put aside for your own pension when you retire.
In truth NI is simply a payroll tax and additional contributions [above the minimum needed to qualify for basic state pension] go into the general taxation pot to be divvied up for all sorts things - good, bad and indifferent!!
If you retire before state pension age you pay tax on your company pension but as you're not employed or self employed you don't pay NICs.

Your post concerns women but us men always got the !!!!!! end of the stick! 5yrs longer to state retirement age, 5yrs more contribs needed, then several years less drawing the blooming pension as the grim reaper visits us earlier!

margaretclare

I agree with Ian. The NI system covers a lot more things than just your retirement.

I'm now retired, but I paid full NI contributions from 16 to 60, that's 44 years minus 3 years out having children and 3 years at university, during which I worked all vacations.

Margaret

h5djr

Your post concerns women but us men always got the !!!!!! end of the stick! 5yrs longer to state retirement age, 5yrs more contribs needed, then several years less drawing the blooming pension as the grim reaper visits us earlier!

I agree. My wife and I are both 60 and both retired. She gets her state pension and I have to wait another 5 years for mine. This means she will get an extra £23k odd. So much for equality.

EdInvestor

h5djr wrote: »

I agree. My wife and I are both 60 and both retired. She gets her state pension and I have to wait another 5 years for mine. This means she will get an extra £23k odd. So much for equality.

Such comments are down to ignorance of course. But never mind, any perceived inequality will all be sorted in 2010.

Meanwhile for more information about how appallingly hard it is for most married women to get a full state pension at the moment (only 37% do, compared with nearly 90% of men) see the many threads on this board.

h5djr

Such comments are down to ignorance of course. But never mind, any perceived inequality will all be sorted in 2010.

Why is my comment down to ignorance. We have both worked from 18 to 60. We have no children and therefore my wife has worked all her life in a good job and has always had a salary as good and at some times better than mine. We have both always paid full NI contributions.

She now has company and private pensions as good as mine and a state pension 5 years earlier.

As you say the some of the inequality will be sorted by 2010.

notahopeinhell

This is slightly off the subject but if anyone can help....

My wife is sixty this year and has asked for a pension estimate which she hasn't received yet. She is also continuing to work after 60 and apparently won't have to pay NI contributions on her salary.

She has been told she needs to send an NI exemption form to her employer but I cannot find anywhere on the Government websites that refers to this or a form to download.

Does anyone on here know if this is true and where we can get a form from please?