National Insurance question

[user093666]

I don't earn enough to pay NI, I earn £160 a week.
On the gov.uk website is states - If you earn between £120 and £184 a week, your contributions are treated as having been paid to protect your National Insurance record.
What does it mean by protecting NI records? I have 20 years of full contributions.

You need 35 years for the new state pension

@mrsbyers

You need 35 years for the new state pension

so does that mean that I would need to earn at least £184 for 15 years to receive state pension?

You need to log on to the government gateway website. You can check your NI record, see how many qualifying years you already have. If you have children and have been claiming child benefit that often counts for NI contributions. If you have incomplete years you can often pay voluntary contributions to make them paid up. You need at least 35 qualifying years to claim a full state pension.

If you have less than 35 years, you will still receive some pension but it would be reduced.

You can check your state pension forecast at www.gov.uk/check-state-pension

It'll tell you which years have full contributions, and where they came from, eg employment or credits - for example I have credits for the years when I was getting child benefit, or voluntary contributions (which I'm currently paying because I retired a few years early)
There's also a link to contact the Pension Service, which I have always found very helpful with any queries (though they do currently have rather long phone-answering times)

In that pay band you mention you are credited with NI contributions, so it counts towards state pension etc, but you don't actually pay anything.

@RustyBear

You can check your state pension forecast at www.gov.uk/check-state-pension

It'll tell you which years have full contributions, and where they came from, eg employment or credits - for example I have credits for the years when I was getting child benefit, or voluntary contributions (which I'm currently paying because I retired a few years early)
There's also a link to contact the Pension Service, which I have always found very helpful with any queries (though they do currently have rather long phone-answering times)

Thank you thats where I checked. It's only this past financial year that i have been earning under the threshold. I don't understand what the bit means about protecting my NI record. How do I know my employer is paying my NI contributions, will it show on the gov.uk website?

@Chasingsquirrels

In that pay band you mention you are credited with NI contributions, so it counts towards state pension etc, but you don't actually pay anything.

ok thank you, so does that mean that for this financial year it will show as a full year contribution?

In the band you mention, above the Lower Earnings Limit but below the Primary Threshold, you are treated as if you have made NI contributions even though you don't pay anything.
It will show on your record.

Your employer will provide the information to HMRC who will apply it to your record.

NIC is very confusing because there are 2 limits.

The lower earnings limit (currently £120 per week) is the limit above which you start to pay NIC. However, at £120 per week you are 'paying' at a rate of 0%.

The primary earnings threshold of £184 per week is when you start seeing actual deductions being taken from your pay.

If you earn between £120-£184 per week then you are deemed to be earning for the purposes of state pension eligibility - so it is counted towards your qualifying credits for the state pension - but you aren't actually paying anything.

If you have been in that pay band for every pay period in the relevant year, then it counts as a full year.

It will show on the website but not until the end of the financial year. if there's a shortfall it will tell you how much it will cost in voluntary contributions to make it a fully qualifying year (last year cost me £12.34). It's relatively easy to make the payment if you can afford it. I think you can make payments for the previous 6 years if needed but it is more expensive the longer you leave it.

What count as qualifying NI years?

Fora qualifying year, you generally need to earn a minimum amount of money during a tax year (6 April to 5 April) and pay the required NI contributions. For 2021/22 these minimums are:

For employees:£120/week, £520/month, £6,240/year.

Yes, when you click on View your record it shows whether each year is full or not, and what type. So in this screen shot, it shows credits for 1998-99 when I was a SAHM, credits plus paid employment for 1999-2000, the year I went back to work, and just paid employment for 2000-01.
But it won't show anything until the end of the financial year, so 2020-21 should be there, but not the current year.

Sorry, forgot the screenshot!