[Closed] Not working, but not retired or on benefits. NI etc?

If you've not got enough years contributions, then you can make optional payments to get more pension:

https://www.gov.uk/pay-voluntary-class-3-national-insurance

IDK if you still get automatic contributions if you 'sign-on' - used to be the case even if you received zero benefits directly. Might have depended on how you came to be out-of-work and I suspect would be based on the fact that you are looking for work (which I think really means just convincing the staff).

Citizen's Advice might also be worth a ring.

If you have a Government Gateway account you can check your NI contributions - you only need to pay them for 35 years to qualify for the full pension.

If you do nothing you'll get a reduced pension when you hit 67 (something like 30/35 ths based on number of years contributions). As mentioned above you can buy missing years by just making a payment (although I think its time limited, so don't want till you're 67 as it might be too late).

Generally, buying missing years is supposed to be a no brainer, so unless you have a medical condition which means you might not live that long, probably worth doing.

Cheers I'll look into CAB and the government gateway.

Yeh I did think there used to be a thing where you :signed on' just for your NI even if not working.

I've paid into local authority pensions most of my life, but 3 different authorities with break when I was claiming on incapacity from about 2008 until 2010, and haven't a clue on that stuff.

Probably not 35 years payments, maybe 33 with part time work at Uni if I even paid it then.

Cheers

Buying missing years might be a no brainer, but it still requires buying it. I certainly hope to be living at 67, but not sure if we could front up 15/16 years of payments.

I guess I need to see when my LA pension can be claimed too.

but not sure if we could front up 15/16 years of payments.

But you don't need to - as I said before, 35 years gets you the full pension. Assuming you started work at 18 and have worked continually, you'll be on 33 years now. However you just cannot opt out of paying more if you continue to work.

I’ve paid into local authority pensions most of my life

Watch that some of it hasn't been counted as contracted out - many public sector pensions are. It could leave you shorter of fully paid up years than you think so do check. As far as buying extra years goes the payback period is 2 years or so if you're in good health but short of funds it may even be worth borrowing to do! Not something you need to sort right now though if you're only 51.

I'm a similar age, and hoping to retire within a few years. I'm 51, and just checked my NI contributions on the Government Gateway.

Turns out I have 36 years - so credited with full years for the last two years at school, plus university years.

Just been through this as self employed non UK resident. Arranged extra years on class 2 which is well worth paying to bring up to a full pension. In my situation I need 39 years.

From going down the HMRC and Future Pensions phoneline hetlaskelter the staff are super helpful but:
HMRC will only tell you about financial things
Future Pensions can tell you about qualifying years

If your question falls between the two, set the afternoon aside for calling.

You may need a NI38 form which is 33 pages of instruction and a 2 page form, post it off and you get a response in 6 of our earth months!

Do it all sooner than later and the staff on the calls are really helpful and not rushed once you connect to someone.

Yeh just checked I have 33 years of full contribution, 2 years not fully paid and this year's not showing, so maybe 1-2 years at £15pw to pay.So yeh if I don't end up working it would be worth looking into paying that.

longdog - you've probably already got ~30 years worth. So only need to buy about 5 years, and you can only pay either current years or historically missing years - you can't pre-pay future years.

Also sign on for as long as you're allowed - probably 6 months, 1/2 hr per week looking for work will be enough to satisfy, and maybe 1 visit a fortnight to sign-on.

If nothing else, £80-90 a week for very effort, especially if you're 'retiring'.

May also possible give you extra NI 'years'.

https://www.gov.uk/national-insurance-credits/eligibility

There is also a time limit, I had a gap year many years ago, and I'm unable to top up my NI payments for that year...

You can check your NI payments and what years are classed as 'not enough NI payment' made on one of the government websites.

Cheers everyone, some helpful information 👍

It may be that once I've recovered a bit more from the strain of keeping going working full-time I'll have the capacity to find some meaningful work even if it's part-time.

I may look at 'signing on' but at the moment the thought of going through that process just makes my head hurt! From what I see in the media it's 10x worse than the nightmare I had back in 2008 😢

I’m not trying to claim any benefits.

I made this mistake years ago. Even if you don't care about any benefits it'll pay your NI. I didn't know this and got a shock when I started working again.

Well that's what I was thinking about Cougar.

It's not that I'd don't care about them, it's just that I doubt I'd get any, other than maybe the NI, and was wondering if it was worth the trauma.

There is also a time limit

I believe it's seven years- after that you can't retrospectively add contributions.

 

I was in a similar situation 9 months ago.
As I'd paid into the system for over 35 years I've still not got round to signing on.
I'll probably do it when I actually start looking for a job...
Don't want to rush into anything.😆

was wondering if it was worth the trauma.

That was pretty much my reasoning, I couldn't be arsed with it.

I don't now how much worth there is in regaling my experiences of 20+ years ago. When I did sign on next time around I didn't find it a trauma per se, rather tedious and patronising. This was in East Lancashire, the bulk of their footfall appeared to be people who didn't want work and they weren't really geared up to deal with people looking for professional roles, doubly so in IT-related fields. They'd asked how I'd been looking for work and I'd say I'd been on cwjobs.com and several others and they'd be like "but have you looked in local newspapers?" Sure, the Accrington Observer is just bursting at the seams with Infrastructure Analyst roles. In the end I gave up trying to explain things and just said yes to everything, they tick their little boxes and I'm free for another fortnight.

Also sign on for as long as you’re allowed – probably 6 months, 1/2 hr per week looking for work will be enough to satisfy, and maybe 1 visit a fortnight to sign-on.

If nothing else, £80-90 a week for very effort, especially if you’re ‘retiring’.

1. If his wife is working he probably won't get anything? (or perhaps you do eventually but its certainly not trivial)
2. If he isn't actually looking for work he'd be committing benefit fraud (ok, so nobody would know, and he's unlikely to get caught - unless he shares that information with the whole of the internet!). I'm not sure how strict they are on job searching now but the only time I've ever signed on they wanted a lot more than 30 mins a week - more like that every day and copies of applications/letters etc.

They’d asked how I’d been looking for work and I’d say I’d been on cwjobs.com and several others and they’d be like “but have you looked in local newspapers?” Sure, the Accrington Observer is just bursting at the seams with Infrastructure Analyst roles. In the end I gave up trying to explain things and just said yes to everything, they tick their little boxes and I’m free for another fortnight.

I had a similar experience, although the arse had fallen out the economy in general at the time so there weren't many jobs available at all.

The system is geared up* to get you off benefits and into any job at all (which will be better than the benefits). Saying "I'm holding out for IT contractor roles to keep me in the Audi Estates and Santa Cruz to which I've become accustomed" isn't in their view a valid reason to be there.

*well that's the aim, they don't really have many tools at their disposal.

I’m not sure how strict they are on job searching now but the only time I’ve ever signed on they wanted a lot more than 30 mins a week – more like that every day and copies of applications/letters etc.

They're pretty strict now, all about targets for striking people off benefits.

Quite an eye opener when I signed on a couple of years back having not done so sine 1991. 30 years of 'benefit scrounger' headlines in the Daily Hate have completed reshaped the system. In the 90s you just turned up once a fortnight and they gave you £37ish a week. Now you have to sign a contract agreeing to do X, Y and Z (which is fine), but the slightest transgression eg 3 seconds late for your appointment - that's a 6 week sanction etc.

I got struck off straight away for going skiing (apparently you can't leave the country). So only claimed £70 and never bothered going back.

Chap I saw was very professional / apologetic about it all and explained how it all worked, he had people monitoring him every day to make sure he was strict enough and more importantly met his quota of sanctions. He had a crib sheet of 'actions' he knew wouldn't be rejected for my 'back to work' plan, you couldn't just write something sensible as it would be rejected for being 'too soft'.

I think I was entitled to 6 months of non means tested Income Support as I'd just been made redundant (company folded), but it just wasn't worth the hassle. Interesting experience though. My contract was one page of things I had to do and about 7 pages of reasons why they could sanction me.

Not sure if it's still the case but when I was signing on 5-6 years ago all your job applications had to be done through the job centre job listings website which did seem fairly effective at pulling listings from other websites but did miss some. Sign on if you enjoy being treated as a number, looked down on and given useless advice and assessed for IT competency by someone who single finger types and has to look for every key on the keyboard.

@poly my thinking too.

My wife's wage I think would wipe out anything I could get other than NI and I've no intention of pretending to look for work if I'm not.

I'd think about signing on if I change my mind and do start looking, but to be fair I'm likely to be pretty picky due to health limits and wanting to do something I'm interested/qualified in. As above they'll just want you to do anything to get you off the list, or sanction you of you don't just go for everything that comes up.

One thing that could be worthwhile, at least in the next tax year, is that you can transfer some of your tax allowance to your wife. It 'earns' your wife about another £250 per year for the sake of a single form. If you do end up working that year it just means you get taxed a bit more and her a bit less until it evens out. Not a big money thing but £250 more in your wife's pocket.
https://www.gov.uk/marriage-allowance

It's been a while since I was a sole trader but IIRC your Class 2 national insurance is then a couple of quid a week, so lower than the cost of paying for a missing year. Even though you're not working, if you get paid for doing anything you could potentially stick it through your sole trader company and then fill in your self assessment form to see if you owe any Class 4 NI on profits over the threshold. Might cover the NI question while making it easier to manage any odd bits of income you pick up.

Cheers for that tax thing.

We a do tax self-assessment as we have a house we rent out that we couldn't sell, but probably could now so might try so that we have a deposit to buy somewhere to live instead of rent (long boring story).

How much does it cost to buy a year of NI contributions?
Or are the voluntary contributions individually assessed?

I think class 3 was £15pw, so £780pa? As others have said enough that for 1-2 years needed in my case it makes it a no brainer. But can only pay it in arrears.

I had 2 years listed as part paid,so I might even be better looking at what I need to just top those 2 years up to make 35.

How much does it cost to buy a year of NI contributions?
Or are the voluntary contributions individually assessed?

@BearBack: you live in Canada don't you?

If you're planning to stay there *forever*, note the the UK state pension is NOT index linked once you claim it - in other words, let's say it's £150 per week when you claim it at 67 then it will never increase whilst you are still living in Canada. And that £150 per week will buy a lot less stuff when you are 80.

I looked at the numbers for buying missing NI , and it wasn't worth it for me if I remain in Canada...

@markgraylish yep, staying here (or Maui but we can all dream) would be the plan.. although these things are always subject to change.
But that's useful that you've crunched the math already so thank you for the insight

The UK state pension is indexed if you are living in the US  so that may influence you differently.

I figured out the ~£800 PA I'd have to pay to buy my "missing" NI conts would be better tucked away in an RRSP, so at least I'd have some control over it and hopefully provide a better return than the extra ~£15-20 per week pension would provide.

Hi there. I'm not working for health reasons at the moment and asked the Job Centre about how to aoid having no NI contributions. They advied the Employment and Support Allowance, which is contributions-based, not income based. Details here:

https://www.gov.uk/employment-support-allowance

Hope that's helpful.

Cheers @stevious 👍

As well as what stevious mentioned, I believe most job centres have a disability specialist who may be able to make adjustments to what you need apply for and ESA. My understanding is a bit dated and hazy as it was a while ago, but were a great help to my wife who struggles with work/health balance.

Edit: or more concisely, they are the person in the building without a script to follow.

Yeh just checked I have 33 years of full contribution

You probably* won't need any more years to qualify for a full state pension. There's an odd calculation based on when the contribution rules changed from 30 years to 35 years.

https://www.gov.uk/new-state-pension/how-its-calculated

I think there's a state pension forecast in the government gateway that tells you how many more qualifying years you need.

* [Edit] assuming you weren't contracted out

Cheers all.

I think the new ESA is just a rebranded Incapacity Benefit that I was on years back? That was not a fun process to go through.

I'm not as bad as I was back then, but before I finished was really struggling to keep up working full-time. And compounding that with trying to stay active outside work.

That's why I was thinking if we could just manage on my wife's wages I just needed to make sure the NI was covered. Then my energy could be used for family stuff and around the house and what activities I can do.

But food for thought to discuss with my wife as arthritic wrists and knees (one partial knee replacement) and a dodgy ticker do make it a struggle, never mind my cognitive issues at times.

1. If his wife is working he probably won’t get anything? (or perhaps you do eventually but its certainly not trivial)
2. If he isn’t actually looking for work he’d be committing benefit fraud (ok, so nobody would know, and he’s unlikely to get caught – unless he shares that information with the whole of the internet!). I’m not sure how strict they are on job searching now but the only time I’ve ever signed on they wanted a lot more than 30 mins a week – more like that every day and copies of applications/letters etc.

1. How about not given advice when you've not a clue?
2. All done online, easypeasy especially if you're not actually wanting a job (or seen as too 'experienced').

Up to the OP, but it's the best hourly rate you'll get (for 6 months anyway).

best of luck @longdog. For what it's worth I found the process ok so far - happy to discuss by DM if you'd like some more input.

Thanks Stevios, might drop you a line.

Mrs BigJohn had a couple of missing years. It would have been quite a lot to buy those contributions but as we rent a couple of houses she was able to pay the (massively) lower contributions as self employed for those years and now has full entitlement.

If you are already doing a self assessment I'd be tempted to do some very limited part time work. I'm sure you can find something that is worthwhile without being taxing. Gardening, selling on eBay, odd jobs, local shop, etc. A little extra cash and all the NI will be covered

Yeah register as self employed, top tip.

Do some gig economy work, e.g. copy writing copify.com etc.

Hmmm... Actually sounds like that could be a plan

You need to check how many years you have paid as others have said, but be careful on how many years you THINK you have contributed as you may have been opted out (contracted out - SERPS) of state pension at some point.

Cheers. I checked. 33 years full NI, 2 years part payment, and 21/22 not up yet on the gateway.

Check how many years you need in the state pension forecast

https://www.gov.uk/check-state-pension

I suspect it won't help with NI but you can apply for Personal Independence Payment whether you are working or not. Its designed to help people live with a disability or long term illness, physical or otherwise.

Initially its a phone call then fill in a form online/on paper.

It's notoriously weighted against the claimant but you have nothing to lose by claiming.

There's some particularly good forums online to help you avoid some designed in pitfalls when applying.

I did the state pension forecast thing for what I'd get from 2037...

Estimate based on your National Insurance record up to 5 April 2021
£164.76 a week.

Forecast if you contribute another 3 years before 5 April 2037
£179.60 a week,which is the maximum amount.

Plus I have LGPS, not sure what that works out at.