The Lemon Fool

For a year of your working life to be a ‘qualifying year’ towards your state pension, you have to have paid (or been credited) with NI contributions on earnings equal to 52 times the weekly lower earnings limit.

As noted above, periods when you are earning below the lower earnings limit do not count towards this target.

But the good news is that weeks (or months) when you are earning more than the lower earnings limit help to make up for weeks (or months) when you were not earning (or earning below the LEL).

To give a simple example, suppose that you have a year in which you do no paid work for 26 weeks and then you do 26 weeks at an earnings level of £236 – double the lower earnings limit.

For the year as a whole, you have qualifying earnings of 52 times the LEL and this is therefore a qualifying year.

chas49 wrote:So provided you earn at least 52 * £120 (the LEL for 2021/22) (i.e. £6240) in the relevant year, you'll have a qualifying year for State Pension purposes, and you won't need to pay voluntary NICs for that year.

quelquod wrote:As things stand you need 35 full years of contributions to qualify for the full state pension. That’s a good bit less than many people work anyway, especially if you plan on working up to your ‘standard retirement date’ so depending how long you’ve worked already it might make no difference to you.

richfool wrote:You can check your NI contributions record after the financial year end and pay any shortfall in contributions to ensure that that year is a qualifying year.

Mc2fool is an expert on this subject.

Andy46 wrote:Thanks. I've just logged into the government website and it says i only need to contribute 9 more years to get the state pension of £179.60 a week. I'm only 43 and have worked full time since around the age of 17, so have 24? years left until state retirement age. What happens in 9 years then? Will i pay less national insurance?

Thanks

Andy46 wrote:Hi
I'm only 43 and have worked full time since around the age of 17, so have 24? years left until state retirement age. What happens in 9 years then? Will i pay less national insurance?
Thanks

pje16 wrote:

Andy46 wrote:Hi
I'm only 43 and have worked full time since around the age of 17, so have 24? years left until state retirement age. What happens in 9 years then? Will i pay less national insurance?
Thanks

Sadly not
I wish that were the case, but come on.... this is the tax world, its not always logical
PS a minor factor, you would probably lose a quarter of your holidays

mutantpoodle wrote:all above seem to cover the 'pension' aspects

but if I were you I would be watching situation carefully re your job
after all, if an employer can see clearly that he can manage without certain staff, he might consider extending the option!

companies cannot manage for long when overstaffed, if they need to be profitable.....what sector are you in?

pje16 wrote:That's ok Andy46
I was thinking of going down to 4 days a week (for complex financial reasons that I won't go into here)
but it was pointed out to me that being on 80% of my salary i would become more attractive to make redundant
I hadn't thought of the obvious

Andy46 wrote:

mutantpoodle wrote:all above seem to cover the 'pension' aspects

but if I were you I would be watching situation carefully re your job
after all, if an employer can see clearly that he can manage without certain staff, he might consider extending the option!

companies cannot manage for long when overstaffed, if they need to be profitable.....what sector are you in?

Hi,

Thanks for the advice. I work in the public sector though so honestly can't see that being an issue.

Thanks

didds wrote:

pje16 wrote:That's ok Andy46
I was thinking of going down to 4 days a week (for complex financial reasons that I won't go into here)
but it was pointed out to me that being on 80% of my salary i would become more attractive to make redundant
I hadn't thought of the obvious

Is that really the case though? After all by making you redundant then, the employer is only saving 80% overall of what they could save ? Or is it based on the up front cost of a 80% redundancy payment versus 100% and no consideration of the ongoing extra 20% saving afterwards?

that notwithstainding, its not people that are made redundant, but positions.

So if the position is redundant, it doesnt matter if its an 80% or 100% position - its the entire posisition irellevant of how much of a week somebody spends doing it ?

pje16 wrote:

So if I go down to 80% say next month the fact that I have earned 100% for decades before does not count towards it