Minimum NI contribut'n not to affect state pension

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  • zagfles
    zagfles Posts: 20,279
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    drumtochty wrote: »
    My concern comes from someone I know having had financial advice saying they should be earning 19k after deductions (8.5k taxable by my calculations) in order to ensure NI contributions didn!!!8217;t impact on state pension eligibility.

    I see similar remarks on many forms not just financial one. "Someone I know etc". If these posters do not believe what these anonymous contacts tell them why do the think some punter on an Internet forum is any more reliable.
    Because there are lots of us, not just one person, and references can be posted to official govt info. Rather than just rely on one person, whoever they are.

    I'd trust this forum to give correct advice over any single financial adviser.
  • KO_Dub
    KO_Dub Posts: 11
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    As one of "these posters" if you would like more precise info on "someone I know" it's a pals girlfriend who has received recent financial advice, whereas I received contradictory info about 18months ago from the HR dept at work. The reason I'm asking on here is that there seems to be several very knowledgeable people happy to help and I'm seeking clarification. Not sure what exactly your issue is but perhaps best not to say anything if you can't help? Ta
  • KO_Dub
    KO_Dub Posts: 11
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    Apologies, I didn’t realise my question was unclear due to terminology used. I would (obviously incorrectly) call taxable income; that which is earned above 11.5k personal allowance but with the exception of my salary sacrifice amount which is non-taxable?
    But to try and clarify...
    I earn about 27k. I pay about 9.5k sal sacrifice, leaving about 5.5-6k taxable when my personal allowance of 11.5k is taken into account.
    These are loose figures as there are some variables. Thanks
  • I'm hoping people in this thread might know if I have my facts right and whether MSE or anybody is lobbying the Government etc to change things? This is my first post! I earn under £490 (but more than £113 for 4 weeks a month) - I get paid monthly so no NIC contributions are paid towards my state pension. My employer will not pay me weekly. This is so wrong and I cannot afford £14+ a week to pay the missing weeks at the end of the financial year. I am a carer on my non-working days - about 20 odd hours a week and I am pleased to have found out that I can get my NIC credits paid through this route (hopefully). I also have had NIC credits in the past when claiming JSA, but having to travel 10 miles each way on the bus meant this cost me £6 and took half a day - so that wasn't ideal. HMRC need to review this monthly pay vs weekly pay NIC credit system - it worries me how many people out there are losing out and don't realise.
  • zagfles
    zagfles Posts: 20,279
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    JaneMick wrote: »
    I'm hoping people in this thread might know if I have my facts right and whether MSE or anybody is lobbying the Government etc to change things? This is my first post! I earn under £490 (but more than £113 for 4 weeks a month) - I get paid monthly so no NIC contributions are paid towards my state pension. My employer will not pay me weekly. This is so wrong and I cannot afford £14+ a week to pay the missing weeks at the end of the financial year. I am a carer on my non-working days - about 20 odd hours a week and I am pleased to have found out that I can get my NIC credits paid through this route (hopefully). I also have had NIC credits in the past when claiming JSA, but having to travel 10 miles each way on the bus meant this cost me £6 and took half a day - so that wasn't ideal. HMRC need to review this monthly pay vs weekly pay NIC credit system - it worries me how many people out there are losing out and don't realise.
    Don't understand what you mean. What difference would paying you weekly make? If you get under £490 a month then that's under £113 a week. So you wouldn't get NI credits either way.

    If you get Working Tax Credits they'll count for NI credits towards the state pension. See https://revenuebenefits.org.uk/tax-credits/guidance/how-much-can-your-client-get/national-insurance-credits/
  • Esox
    Esox Posts: 25 Forumite
    edited 16 February 2018 at 5:19PM
    zagfles wrote: »
    Don't understand what you mean. What difference would paying you weekly make? If you get under £490 a month then that's under £113 a week. So you wouldn't get NI credits either way.

    If you get Working Tax Credits they'll count for NI credits towards the state pension. See https://revenuebenefits.org.uk/tax-credits/guidance/how-much-can-your-client-get/national-insurance-credits/

    Class 1 National Insurance thresholds 2017 to 2018
    Lower Earnings Limit (LEL) £113 per week, £490 per month, £5,876 per year

    Presume if any of the above thresholds are exceeded then you are ok?

    https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2017-to-2018
  • zagfles
    zagfles Posts: 20,279
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    Esox wrote: »
    Class 1 National Insurance thresholds 2017 to 2018
    Lower Earnings Limit (LEL) £113 per week, £490 per month, £5,876 per year

    Presume if any of the above thresholds are exceeded then you are ok?

    https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2017-to-2018
    AIUI - if you get paid weekly, you use the weekly thresholds and only count weeks in which you earnt the LEL or over. Also don't count any earnings above the UEL. If that adds up to more than £5876 in a year then it's a qualifying year.

    Any week where you earned under £113 doesn't count at all. So for instance if you earn £113 for 52 weeks it's a qualifying year. But if you earnt £113 for 50 weeks, £112 one week and £200 one week, it's not a qualifying year! Because the £112 week doesn't count at all, your total is £5850.

    Same for monthly except use £490 a month.

    Think annually is only used for self employed and directors.

    That's my understanding anyway...it's stupidly and unnecessarily complicated. There are loads of other anomalies like someone earning £200 a week for half the year and nothing for the other half pays NI but gets no credits, whereas someone earning £120 a week for the whole year doesn't pay any NI but does get credits!

    The govt did promise ages to ago to address these sorts of anomalies by harmanising the operation of NI with tax, but seem to have kicked it into the long grass...
  • greenglide
    greenglide Posts: 3,301
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    edited 16 February 2018 at 7:04PM
    Presume if any of the above thresholds are exceeded then you are ok?
    You have to be paid a minimum of £5,856 in a tax year for it to be aqualifying year. This is an average of £113 a week or £490 a month but this is pretty much irrelevant.

    The £5,856 in a year is the key.

    Edit to add : this assumes that the person does not exceed the Upper Earnings limit in any pay period which seems unlikely.
  • zagfles
    zagfles Posts: 20,279
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    greenglide wrote: »
    You have to be paid a minimum of £5,856 in a tax year for it to be aqualifying year. This is an average of £113 a week or £490 a month but this is pretty much irrelevant.

    The £5,856 in a year is the key.

    Edit to add : this assumes that the person does not exceed the Upper Earnings limit in any pay period which seems unlikely.
    £5876. And note the point above about any earnings under the LEL in any pay period. As I understand it those earnings don't count at all.
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