Starting as self employed - national insurance - clarification please!

[frazzeled]

I currently work PaYE but don't earn enough to pay national insurance (approx £330 per month). I am also going to start working self employed alongside this. Is it right that when I register I will pay class 2 national insurance? Will this then count as my years towards state pension? Will that only entitle me to the lower rate state pension - and if so how do I pay enough to get the additional state pension? I am only 36, and have paid 12 years approximatly of national insurance already.

Sorry so many questions!! Any help/advice greatfully received!

From what I understand of what I pay class 2 are flat rate that you pay unless you earn below a certain level and contributes to your basic pension and other benefits. Class 4 you pay on profit above a certain level and do not contribute to pension or any other benefits.
Again as I understand as self employed you don't seem to be able to contribute to earnings related pension and as such it is essential to have your own pension. Don't forget that private pension payments do have tax benefits.

For young people, pensions are heading down the pan.
Worry more about other forms of income for when you are older.

NI is on a 'per job' basis
Class 2 entitles you to the basic State pension (for what that is worth)
so is probably worth paying even if your net earnings from self employment are below the limit

Thank you!

I'm guessing you are a parent, Frazzeled?
If you are in receipt of Child Benefit, you automatically receive Class 3 "National Insurance Credits" until your youngest child is 12 which cover your State Pension contribution for those years.

www.gov.uk/national-insurance-credits

If you will be earning less than £5,885 with your self employed work for the year, you can apply for a "Small Earnings Exception" certificate so you don't need to pay the Class 2 NICS.
Be warned though - should you be planning on having a baby, having one of these greatly reduces the amount of Maternity Allowance you are entitled to! Should that be a possibility do not get one and pay the £2.75 per week!

Please read this:
businessplusbaby.com/2010/09/08/self-employed-protect-your-right-to-maternity-allowance/?doing_wp_cron=1412937157.4303960800170898437500

Hope that's useful. :-)

Sorry for such a late reply Claire - yes I am but don't qualify for child benefit as. Y husband is a higher earner. Will look at your link though. Many thanks.