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NI contribution in retirement year

Discussion in 'Retirement' started by Welliebobs, Jan 21, 2020.

  1. Welliebobs

    Welliebobs New commenter

    Can anyone advise on whether their NI contributions were enough for a full year's worth when retiring at the end of August? OH needs 5 extra years of contributions to reach the max State Pension but has paid £2350 NI between April and August. Since then nothing. Can’t find anything definitive to confirm the situation.
    Many thanks.
  2. marlin

    marlin Star commenter

    Have you checked on the Government Gateway site? You can log in and see how many full years you have there. If you want to speak to someone for advice (and I suggest that it might be a good idea to do so) then you can ring the Future Pensions people on 0800 731 0175 - assuming that your OH has not reached State Pension retirement age). It is worth having your Gateway page open when talking to them. They can also direct you to the correct place for making any payments. When going through to the NI payments I was asked if I had already been in touch with Future Pensions.

    (I was doing this just a couple of weeks ago!)
    border_walker, Piranha and Welliebobs like this.
  3. Rott Weiler

    Rott Weiler Star commenter Forum guide

    Does this help (from MoneySavingExpert)?

    What are qualifying NI years – and how do I find out how many I've got?

    For a qualifying year, you generally need to earn a minimum amount of money during a tax year (6 April to 5 April) and pay the required NI contributions. For 2019/20 these minimums are...

    For employees: £118/week, £512/month, £6,136/year

    For the self-employed: £123/week, £531/month, £6,365/year

    If you work full-time, even on the minimum wage or just a few days a week throughout the year, you are likely to earn a qualifying year. And, to reiterate, these qualifying years can be from before or after 6 April 2016 and don't have to be consecutive – they can be dotted about over a much longer period.
    So looks like it counts as a qualifying year if you have earned enough in the year to pay any NI contributions, ie over £6,136 in 2019-20 tax year. How much the NI contributions are doesn't seem relevant. April - August, 5 months, should take any teacher well over the threshold.
    eljefeb90 and Welliebobs like this.
  4. Welliebobs

    Welliebobs New commenter

    Thankyou, yes, we have checked there, but the current year is not available yet. We were wondering about the likelihood of the current year being rated a ‘full’ year, or whether some inviligilation would be a cheaper option than making up the year via a voluntary contribution.
  5. Welliebobs

    Welliebobs New commenter

    Thankyou. That looks hopeful. We saw a few posts on MSE implying that the NI payments needed to be made regularly through the year, but it all seemed a bit vague and confused.

    Anybody here retired August 2018 or before who can confirm they got the full year with no further contributions after August?

  6. phatsals

    phatsals Established commenter

    You have 6 years to pay any shortfall so no need to panic. If you mean between April and August '19, the tax year isn't yet over and will not yet be up to date. You will eventually get a letter if there is a shortfall, giving you the opportunity to make up any difference. Given that now NI is looked at annually, not a minimum per month, you OH has probably contributed enough, if an entire year were missing it is around £750 pa Class 3 contribution.

    Not sure what you read on MSE but no, there is no need to make regular contributions. You could wait 6 years and pay the lot in one go should you so wish. It would all count.

    If the tax year you are concerned about is '18/19, check if it's been updated. Look online at your own Personal Tax Account, all your records are available on there. If the year is incomplete and you're concerned, ring them up to check if there is a shortfall.

    For the future, invigilating is the way forward, paying Class 2 NI. That would be around £155 for a year.
    Welliebobs likes this.
  7. frangipani123

    frangipani123 Lead commenter

    I finished my job on 15 July and that year was classed as a full year of NI contributions. I would ring them up and ask them to be certain.
    Welliebobs likes this.
  8. Welliebobs

    Welliebobs New commenter

    Thanks, that seems clear cut. With the current year not being updated till after April, we wondered if some invigilation before March would cover any shortfall this year more cheaply. Happily, it doesn’t sound as if there will be a shortfall, though.

    Many thanks everyone. This is a great resource due to some seriously stellar contributors.
    eljefeb90 likes this.
  9. makras

    makras Occasional commenter

    eljefeb90 and Welliebobs like this.
  10. catmother

    catmother Star commenter

    I'm in the same situation but I don't think there is any rush. If it counts,great. If it doesn't there is the option to buy in.
    Welliebobs likes this.
  11. diddydave

    diddydave Established commenter

    I don't think you'll need to do it but if you do being "an invigilator" is certainly an excellent route - if you tell the HMRC you are this then you can pay the cheaper Class 2 NI contributions of £156 (£3 a week) rather than £15 a week for the Class 3.
    Welliebobs likes this.
  12. catmother

    catmother Star commenter

    However,I don't think you can buy in advance, you have to wait until they tell you there are gaps.
    border_walker and Welliebobs like this.
  13. eljefeb90

    eljefeb90 Senior commenter

    Great thread. Even though I have been classed as an invigilator for a couple of years, I have learned something new today.
    This forum has literally saved me thousands over the years. Well done, Team TES!
    Jamvic and Treacle3 like this.
  14. Treacle3

    Treacle3 New commenter

    Me too. Thanks contributors:)
    Jamvic and eljefeb90 like this.
  15. Piranha

    Piranha Star commenter

    The amount you pay depends on the year you are making up, not when you made the payment. See https://www.gov.uk/voluntary-national-insurance-contributions/rates . It is true that you pay a lot less if you earn some money from certain occupations, such as invigilation and exam marking. I recommend, for those who don't mind keeping something like their old job, setting up a small tutoring business. I aim to earn the £1,000 per year from this which is tax free, and then pay my £156 which is less than the tax would be.
  16. makras

    makras Occasional commenter

    I checked my gov account and found that I've been paying between £2000+ /£3000 NI a year. I have 6 years not full/unpaid so you'd think the taxman should take those higher payment into account and fill the gaps but they don't.

    it's too late for me to pay for the gaps. How can I pay for them otherwise?
  17. Piranha

    Piranha Star commenter

    It is done by the number of years, not the amount you pay each year. You can only pay for gaps over the last six tax years. However, I found I will be able to get up to the maximum pension if I pay class 2 contributions each year between now and my state retirement date.
  18. frangipani123

    frangipani123 Lead commenter

    catmother likes this.
  19. catmother

    catmother Star commenter

    Not how it works!
    As for your 6 years,they might not even be relevant. What matters is how many years you will have once you stop working. You might have enough for a full (or near enough full) state pension.
  20. catmother

    catmother Star commenter

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