What happens once you have paid up your NI years?

[KingSatsuma]

I will have paid up all my NI contributions (35 years) by age 62. I am planning on working past this.

What happens then? The info seems vague. There are lots of "may" affect your entitlements if you don't carry on paying it.

If I have paid up, I then want to take that money and put it in a private fund. Also, what about your employer? Once you reach 35 years, do they still have to pay it?

Yes and this could be sorted with changes to rates and thresholds.

Hi, glad it was helpful. The 9 months was because I paid back the underpaid tax over 6 months. I could have paid off as lump sum and had it settled up quicker, but I was fine with them taking it back over 6 months.

my company was very good at giving us financial advice all the way through our careers at all levels. They gave a retirement financial / tax session with a clear “ manage your tax code, this is how it will work” speech. So I was prepared. And HMRC, once you get through (😱🤣) are normally lovely and very helpful.

You have to keep paying NI until you reach state pension age. One thing I don't get. If you are self employed, you can be a sole trader and your NI is calculated on your annual profit. If you then become a limited company, you can pay yourself the minimum you need as a salary to pay a tiny amount of NI, just a few pence per week (I am not sure of the threshold). You then pay corporation tax at 19%, increasing this year to 25%, but still less than paye tax and insurance. As you have paid NI every week, you will be eligible for a full state pension. Some on PAYE who pays much more per week but then stops working, could well pay much more in NI but not be eligible for a full pension. Ot seems crackers. The self employed company director will pay dividend tax on extra money they take out, but that is still lower than PAYE. Perhaps an accountant could explain the logic.

I don’t see why you should have to contribute to your state pension via NI once you’ve hit your 35 years. Maybe for the NHS, but it should at least be reduced.

OP if you really think this you must be quite naive about the government's ability to actually fund all of the state pensions they have promised people.

You are lucky to be getting a state pension at all tbh. Many of the younger generation will quite likely not get anything, and will definitely not get what you are entitled to. Frankly I think you should count yourself lucky and stop complaining.

Ok let's sort this out , lots of people get this wrong .

You are not paying NI into an account / pot with your name on. What you pay now pays for others ( now ) to receive their pension. When you retire , those currently working will be paying yours.
You continue to pay NI until you stopping working , again because ( put simply ) it's for the good of the nation's pension pot.running

When you retire , to get a set amount up to full contributions. It doesn't matter if you paid low contributions ( minimum wage / had it paid for you via qualifying years child benefit / other forms of benefit ) or was paying large amounts due to high wage. You all would still receive the same amount of pension in value.

The reason pension age is rising is because more people are needed to fund the cost of the pension scheme to keep it running because their are more people claiming state pension ( we are living longer ) Again also why it doesn't stop once you have worked all your qualifying years , you pay to help people now , others will be paying yours when it's your time to receive it .

Wow. Abrasive or what.

The poster actually has a valid point - if 35 full years provides a full state pension, were the incentive to continue to pay? Obviously with Paye one has no choice, but you are naïve if you think that’s the only method of earning income. As an example, one could simply reduce working days or paye income to earn £12k a year and pay virtually no taxes of any kind. If they need more, there are methods of taking profits which are more efficient.

As for the young people debate, who will not be getting anything? You’re conjecturing badly. More likely that the SP will become means tested, or the whole Ponzi scheme will evolve into something different, administered in the form of a sovereign wealth fund, but it would require a period of fantastic growth and profitability for Uk plc to commence, and still have to be underwritten by successive governments. Alas, none of that is in sight now with these Tory twat heads or Innumerate Labour louts, with their party politics being more important than the long term issues our systems face.

And btw - you are more of a complainer than the poster above.

Many of the younger generation will quite likely not get anything

My late parents were convinced that as part of the “younger generation” they would get no state pension. Endless whinging as I grew up and especially through the economic crises of the 80s and 00s. They got their state pension.

I think it’s just inter-generational fear mongering bollocks that there will be no state pension.

It's funny you should say that, as I was just thinking the very same thing- my late dad (who would have been ninety now) also spent many years convinced that the state pension would have become unworkable by the time he and my mum reached retirement age, because of the aging population

my late dad (who would have been ninety now) also spent many years convinced that the state pension would have become unworkable by the time he and my mum reached retirement age, because of the aging population

But the demographics hadn't shifted then? Birth rates were much higher. We now have more over 65s then u15s & whilst pension age is moving out, life expectancy hasn't increased.

I've got 46 years worth of contributions. You stop paying when you stop earning.

No you stop paying depending upon age. There are people earning now who don't pay because of their state pension age.

Both are true - you stop paying at SPA if you are still working but you can also stop paying if you stop working before SPA (as I have).

Demographics had their own shift. My late parents were early baby boomers as in the biggest generation ever (at the time) and their children(us) were the baby bust (Gen X, the smallest generation ever).

And they were whinging on about it before the Millennials had been born and it was clear they were an even bigger generation than the baby boomers. At the time, it was looking like our baby bust generation was going to be the usual extra low birth rate from here on out. Once the Millennials came along, they calmed down a bit.

I remember learning back in 1978/1979, in a sixth form Sociology class, about our aging population and the problems it would lead to, so it's not really surprising that my dad was aware of it too, and could see how it might easily impact his generation by the time they reached retirement age. In the event, that particular problem didn't affect his state pension, though other crises in our economy around his retirement age certainly affected his relatively small private pension.

They force you to keep paying so Big State can waste money like water in the usual way. I had paid NI full time for 40 years without a break ever (not even took maternity leaves). I have to keep paying NI until I am 67, even though when I started it was just to age 60 but the state changes rules all the time. Knowing my luck by the time I reach 67 they will decide not to pay old age pensions. Even if they still do the state will take 40% or 45% of it away so it ill probably just about pay my £4600 a year council tax bill plus a bit towards the heating.

@OP I think you are geting confused with not having to pay NI once you pass retirement age:

National Insurance and tax after State Pension age: Overview - GOV.UK (www.gov.uk)

Unfortunetly, (or fortunetly depending on your outlook) you do still have to pay it up until then even if you have you 35 years of contributions.

If you are still working that is! You don't have to pay it if you aren't working.

OP - you keep paying as you are still in employment. Public services are provided (and desperately need more funding) regardless of your working age.

You can go all of your life living on benefits but you still get a pension when you ‘retire’, takes the piss really doesn’t it.

No it doesn't take the piss. People who are unable to work or unable to find work shouldn't be penalised and left to starve in the gutter once they're no longer of working age, that's inhumane. You think someone caring for a disabled person doesn't deserve state pension? What about someone made redundant and unable to secure further employment? Or someone too ill to work?

People who simply choose not to work and who also choose not to pay voluntary class 3 NI contributions will be penalised by not being eligible for state pension. Those people will usually have some other sort of income/investments meaning they don't need a state pension ie they're rich, or their parents or partner are, or they've saved lots into a private pension.

State pension is a state benefit. One that's not means tested but based upon qualifying years for NI. People on benefits receive NI credits towards their qualifying years. The state pension isn't paid "when you retire" it's able to be claimed once you reach retirement age, regardless of whether you continue to work or not, or whether you've never worked.