Should I continue to pay national insurance?

7 December 2018

Q

How do I make national insurance contributions (NICs) if I’m not employed? I am 43 years old and had my long-term employment terminated due to health issues in July.

I own a buy-to-let property and make reasonable money from it. It isn’t enough to take me above my personal allowance of £12,300 (I’m sight-impaired, so get a higher rate).

I’ve been paying into a private pension scheme for 18 years. Should I make NICs until I reach retirement age or should I not bother as I have a private pension?

From
DC/Dorset

A

You are correct in thinking that you need to have 35 years of NICs to qualify for the full state pension and you need a minimum of 10 years to receive anything. If you have between 10 and 35 years of NICs, you will get a pro-rata amount.

Before you pay any Voluntary NICs (VNICs), you should check your NI record to see what you’ve paid in so far, any NI credits you’ve received, any gaps you have and what it would cost to fill the gaps.

For example, if you are on employment and support allowance or unemployability supplement or allowance you will be getting NICs. If you are not on employment and support allowance but you satisfy the conditions for it, you should contact your local Jobcentre to claim Class 1 credits. You can find out more information about NI credits at Gov.uk/national-insurance-credits.

You have three options:

  1. Pay VNICs to fill any gaps to make past years full qualifying years.
  2. Return to work (health permitting) and gain additional qualifying years. You are only 44, so have at least 22 more years to build.
  3. Consider paying Class 3 VNICs for future tax years.