This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Voluntary Class 2 NIC's

Tom2247
Posts:3
Joined:Wed Dec 15, 2021 11:09 pm
Voluntary Class 2 NIC's

Postby Tom2247 » Fri Dec 17, 2021 12:15 am

My profit was lower than the £6475 limit so Class 2 NIC is voluntary, should I still choose to pay it?

I know there are certain benefits but the main one seems to be self-employed maternity pay and I won't need that, I am a single male in my early 20's and as far as I can tell I need to make contributions for 35 years by the time I retire to get full benefits but as the retirement age will be well into the 60's so I still have time.

Does it make sense to pay it voluntarily?

Thanks

robbob
Posts:3207
Joined:Wed Aug 06, 2008 4:01 pm

Re: Voluntary Class 2 NIC's

Postby robbob » Fri Dec 17, 2021 10:41 am

you seem to be up with events - paying may make you eligible for employment support allowance - but other than that as you say if you expect to get enough years stamp ther is plenty of scope to miss a few on the way.

One thing to bear in mind pension rules in 30 years time may be vastly different and less generous than they are now - i rememeber not so liong back getting £30 quid a week knocked of my projected pension and i was in my 40's - so unfortunately government promises ofetn mean didly squat.

etf
Posts:840
Joined:Mon Nov 02, 2009 5:25 pm

Re: Voluntary Class 2 NIC's

Postby etf » Fri Dec 17, 2021 5:40 pm

A google search indicates the full new State Pension is £179.60 per week, so £9,339.20 for 52 weeks.

An annual payment of 52 x £3.05 is an outlay of £158.60 and currently equates to 1/35th of the above entitlement or £266.83 and you'll get that every year once you hit retirement age (or whatever amount is being paid when you retire).

As robbob says, if you think you'll get to 35 qualifying years without the voluntary contribution and it is still 35 qualifying years when you come to claim (I think it used to be 30 years) then perhaps you may wish to save your money.

I'm not a State Pension expert so if there are any out there and the above logic is flawed hopefully someone will correct me.

strawn
Posts:72
Joined:Fri Jun 01, 2012 10:11 am

Re: Voluntary Class 2 NIC's

Postby strawn » Sat Dec 18, 2021 2:25 am

I think it used to be 30 years
It was briefly but for the great bulk of my working life it was 44 years for men, five years fewer for women.

Coo, the young don't know how lucky they are.


Return to “PAYE and Payroll Taxes, National Insurance, NICs”