Do you know how much state pension you will receive when you retire? You can find this figure though your online personal tax account; click on ‘view state pension forecast’.
People who reach state retirement age after 5 April 2016 need 35 full years of national insurance contributions (NIC) to qualify for the full state pension.
Your personal tax account also shows any gaps in your NIC record.
An incomplete NIC year will be recorded for periods in which you were contracted out of the state pension. If you are still under state pension age (which is gradually increasing to 68) you can continue to pay NIC or collect NIC credits to boost the amount of your state pension.
Self-employed individuals need to pay class 2 NIC of £153.40 for 2018-19 to achieve a full NIC year. If you are employed you can accrue a full year of NIC for free by earning between £6,032 and £8,424 for 2018-19. If you are neither employed nor self-employed you can pay class 3 NIC on a voluntary basis at £14.65 per week. Class 3 NIC can also be used to fill gaps in your NIC record for the last six years.
Would you like help and advice on this or any other issue?
Contact us straight away by telephoning 01932 564098 or email us using our ‘Contact Us’ page.
This note was published from our Winter 2018 Tax Briefing dated December 2018
Please be aware that the information above may have changed in subsequent months.
This note is written for the general interest of our clients and is not a substitute for consulting the relevant legislation or for taking professional advice.