NI Contributions query

[SnowyWellies]

Does anyone know what to do in this situation?

I am currently employed and have resigned from my job. (Commuting costs and childcare took more than my salary and I was bloody miserable in the job anyway). I will not be looking for work for a year or so, until youngest at school, and I am not going to be on jobseekers or any other benefits. DH earns above the child benefit threshold too.

DH works and pays tax. I have a small flat that I rent out. The income from this is going to fund my not working. Each year I fill out a self assessment where this rental income is declared and I pay tax on this.

I am wondering about NI contributions. If I am not working, then I am not making any. But, am I still entitled to access the NHS and all that? I am not sure how that works. DH says that NI mainly goes towards paying a state pension- well, I am not contributing to that either. (Although I pay tax on the rental income).

I guess my point is that I am paying my taxes, but am unclear if this entitles me to what separate NI payments are meant to entitle me to.

Sorry if that all sounds rather confused!

If you are registered for CB, whether you elect to receive payments or not , your NI records will be maintained.

Yes you're still entitled to NHS etc.

I would phone them. You could always make voluntary contributions which are about £12 a month I think.

Thank you so much for your replies! I like the idea of making voluntary contributions. Hopefully it will be temporary as I want to retrain and go back to work in a couple of years.

no-one is going to check if you have paid your NI before letting you see your GP! You pay taxes and contribute, don't worry about it.

Voluntary contributions may be worth considering - but get a statement first of how many years you have built up. Currently you need 30 years to get a full state pension, (Down from 38 a few years ago) proposals are to put it back to 35. If you are a long way off pension age and pay too many years you don't get it back. If you are a long way off pension age (as you presumably are with a preschooler) then consider whether it is worth paying extra, as when you go back to work you will start paying NI again.

assuming that there IS a state pension by the time you get to that age...

Thanks special. Actually- I did not know about the 30 years for a state pension- I migrated here 5 years ago and have been working for 4 so I will possibly not make the 30 years anyway before retirement- certainly not the 35. Hmmm. I have a workplace pension scheme and was thinking of making private contributions to that also, but am not sure if that would work either.

Dh says that also about a state pension.....

I do not know enough about how anything works really. I possibly need to see an accountant, or at the very least deleve a great deal deeper.

*delve

An accountant would be good as I think some of your pension contributions will be deductible from the tax you pay on your self-assessment tax return.

If you are getting child benefit for a child under 12 you will accrue pension credit. If you have recently opted not to receive CB to avoid your DH paying the High Income Child Benefit charge you will still accrue the credit.

As you have rental income you may find that an accountant can save tax on this.

Thanks so much. I think definitely a trip to an accountant is a good idea. I have little idea about anything- work has always sorted it out, and then I just merrily fill in my self assessment forms each year.

Oh- and thanks again. I VERY much appreciate people taking the time to reply.

be careful though

Your pension contributions for work would likely be deducted before tax so you get relief that way and cannot claim further relief through self assessment

Also, would recommend pension forecast as then you can make a decision as voluntary contributions (class 3) are £689 per annum for missed years.

sorry just re read your post on pension

Any pension contributions made would be tax deductible but if you resign are you entitled to make contributions to a work pension when you no longer work there?

Or are you going to transfer it to a private pension scheme?

Thanks Chablis I mean to ask HR if I can make contributions to my work pension. I am guessing though that they will not allow me so I will have to transfer it. It is such a meagre amount that I would almost rather invest it myself into shares but I expect this is not allowable too.

A pension forecast is a great idea!

Many many thanks.

I have been having similar issues with whether i am eligible for Maternity Allowance. It seems you can make voluntary NIC's and can also backpay it.

www.hmrc.gov.uk/ni/intro/basics.htm

Contact details:
www.hmrc.gov.uk/ni/intro/check-record.htm

www.gov.uk/voluntary-national-insurance-contributions/why-pay-voluntary-contributions

Class 3 voluntary contributions only count towards the basic state pension, they do not entitle you to Maternity Allowance or any other benefits.

If you are self employed you normally pay Class 2 National Insurance contributions which DO entitle you to MA and some other benefits, as well as credit towards pension.

If you are self employed and your earnings are low you can opt out of paying Class 2 contributions (e.g. if are getting or have claimed eligibility for Child Benefit for a child under 12 so are already getting credit towards basic state pension), but obviously if you might want to claim MA this is a bad idea.