Not working ...

[Fnaar]

Hi all
Since late Feb, I have been not working, through choice ... was offered, and took, voluntary severance. I will need to keep money coming in (have lots of ideas for that, don't need advice on that thanks). I have no intention of working for the next 2 months or so, and have no intention of signing on.

Just wondering though where I stand with National Insurance for example ... should I be making voluntary contributions, or anything else the wise folk of CC can think of?

Thanks

 

[fossyant]

Just be wary with not signing on - you might just need to so you don't get a gap in NI (even if not earning).

 

[irw]

Can you register as self employed, and pay NI through that route? Would any of your ideas to keep money coming in require this anyway?

 

[MarkF]

I've had a few long term gaps, through choice, and settled up my NI shortfalls with a phone call, they sent me a letter with a figure & l settled.

But now at 56, l've already made my 35 year contributions, so assume that l can't have a shortfall if l take another break. You can check your NI status through the Gov Gateway site.

 

[cisamcgu]

Check your current situation : https://www.gov.uk/check-national-insurance-record

 

[PeteXXX]

You used to be able to purchase a 'non employed' stamp that would keep your contributions up to date.

 

[yello]

But now at 56, l've already made my 35 year contributions, so assume that l can't have a shortfall if l take another break.

That's my understanding. Once you've qualified then, like they nearly say in the song, 'oh no, they can't take that away from you"

I've only 30 qualifying years (good for the basic state pension) BUT, due to my age and the way the various dates fall, this still qualifies me for the new state pension too. I don't understand why, and I've had it confirmed twice (verbally and in writing), but basically once I'd qualified with my 30 years that meant I'd qualified fullstop for ever and a day, no matter if the rules changed.

I'd guess there's quite a few people in the same somewhat fortunate circumstance. The way it was explained to me at the time (when the rules 1st got changed) was that there'd not be many people who'd stop working with 30 qualifying years, most would need to continue working anyway - so whilst on paper it looks like a giveaway, fact is that there'd not be many people that would be in that position in reality.

 

[raleighnut]

A mate did this and the Taxman got very shirty with him saying "You must have had an income" and taxed him at 'emergency rate' for the rest of the year, he eventually got a rebate but it took ages to get it back off them. Not sure but I think he told em he'd taken an extended holiday and that got them to believe him (eventually)

 

[srw]

It depends on whether you think you'll need to rely on a state benefit that depends on NI without a short gap. Professionals are probably better placed than an internet forum to tell you that.

Since "signing on" these days seems to involve demonstrating that you've got a full time job applying for other jobs, you're sensible not thinking about it. I had no problem with tax when I took a break from paid employment - when I got my next job that was taxed as usual, and my tax return squared everything up.

 

[bikingdad90]

NIC goes beyond state pension. If you decide to claim benefits at any point in the future it may impact on the type of calculation used in the benefit you receive.

If you pay class 2 and class 4 NIC (self employed) you can only get income calculated rather than contribution calculated which you would get if you had paid employee class 1 NIC.

Also, if you happen to be in receipt of child benefit (£80/4weeks +£20/4weeks additional child) you can switch the name from the connected party to yourself and get NIC contribution that way.

If your going self employed (or umbrella personal service company) then there maybe various allowances and reliefs available for utilising the termination payments in a new enterprise, depending on what your doing.

 

[annedonnelly]

Check your current situation : https://www.gov.uk/check-national-insurance-record

^This. And as I understand it from my pension adviser you can make a lump sum payment to top it up if necessary.

 

[Fnaar]

Thanks everyone so far ... there's some very useful things there for me to look into. Very much appreciated

 

[Levo-Lon]

A mate did this and the Taxman got very shirty with him saying "You must have had an income" and taxed him at 'emergency rate' for the rest of the year, he eventually got a rebate but it took ages to get it back off them. Not sure but I think he told em he'd taken an extended holiday and that got them to believe him (eventually)

If it can be easily proved your using savings to live then no problem.
It's when you cant show how your living and paying they get a bit awkward..

I fall into the over 35 yrs paid in now but i was self employed and have signed on in my early working life.
I was told to sign on for Ni payment

 

[Dave 123]

I had a period before working here where didn’t sign on, then I worked for myself.

I had to make a top up payment.

I’m all covered now.

 

[raleighnut]

If it can be easily proved your using savings to live then no problem.
It's when you cant show how your living and paying they get a bit awkward..

I fall into the over 35 yrs paid in now but i was self employed and have signed on in my early working life.
I was told to sign on for Ni payment

Yeah, that's what they told Pete but when he found out the hoops the DWP wanted him to jump through applying for jobs and writing it all in a little booklet then showing it to some "Snotty nosed kid who'd never done a days graft" as he put it. He told them to "stick it" but then again he'd paid off his mortgage years before, had a bunch of money in the bank and had bought his parents Council house outright (they still lived there at the time) under the 'right to buy' scheme.