Ni Contributions

[Old_Geezer]

Unsure which forum is best as I didn't spot a 'government' or 'taxation' one, so I'll try here.

One possibility I may face during the next year is to be unemployed, at an age when for sure I'm not that interested in looking for another job. For the few employers that would be interested in considering an older guy as employee, I can't see any offering a decent salary position; especially as the technical knowledge I have is more suited to old defunct equipment and I'm already finding it difficult to be as adept as I used to be on the new tech. Both mind & body no longer at their peak, seems to be in freefall on occasion.

So, as a precaution, I'm preparing for the possibility of leaving the rat race by saving all I can in the hope I can fund myself until the first pension kicks in. (It may mean I do not die still employed as my father and grandfather did before me, and I get a few years for myself.)

So I was under the impression that having contributed well over 30 years of NI contributions I was set to no longer contribute after such an event. For sure I can find details in the Net saying the State pension is sorted, and I assumed it also applied to everything the NI funded. But the trouble with speaking to friends over a pint or two at the pub is that one said, "Ah but you will still have to carry on paying in order to get the service of the NHS !"

What is the situation there ? Does the government expect folk with no income, and not wanting to seek further employment to continue to stump up even after 30 years contributions ?

Am I obliged to job seek knowing that none will be suitable whilst others seem to be on permanent welfare ?

Cheers.

[Old_Geezer]

I'm aware that the NI funds a number of things including NHS, pensions, and other entitlements; and is supposed to be ring-fenced (accountancy trick) from other taxation (which causes more issues it seems than it solves given that contributions are not invested for the benefit of the contributor). That aside.

The question was: if I became unemployed and opted to fund myself thereafter, rather than go looking for any welfare payments I might be entitled to, did I still need to pay NI given that I have already paid in many years of contributions, and that I'm well over the 30 year's worth of contributions needed to qualify for the basic State pension (when I get to 93 or 108 or 2039 or whatever age the "elite's" pushed it up to when I reach the movable finishing line).

I shall check the links and respond as appropriate, thanks.

[Old_Geezer]

Ah that is interesting FF. I thought NHS was one of the things funded. Shows how unclear this all is the majority of the population. They need to sort that out then. For sure I've checked this many times in the past, must have a mental block of recalling what is and is not included.

So, if no JSA, E&SA, Maternity, nor Bereavement, then I'm ok. If so that's good, my calculations up until now have been more or less right then.

[DocHH]

O-G
You really need to register with the Job Centre, or whatever they call theirselves now. You will qualify for NIC based Job Seeker Allowance for 6 months, OK you may not need it, but you are entitled to it, so take it, even though it may be taxable. It also ensures you qualify for an extra 6 months NIC contributions. In the current political scenario you never know what might happen. After 6 months any "unemployment" benefits will be means tested. I am not aware that you are liable for NI contributions when unemployed to ensure you are treated on the NHS! Not sure how that applies to dental charges! I believe you should get yourself into the system, claim what you are entitled to and make decisions about your future after that. To be honest I was made redundant twice in my career, both occasions presented opportunities that turned out to be beneficial! All the best for the future.

[EDDIE51]

OG if you have reached the age when a female born on the same day as you would qualify for state pension you can claim Pension Credit.
I know you say you do not want to look for benefits but as you have paid your NI for all these years you are entitled to it. You do not have to 'sign on' or do anything just collect it every 4 weeks.

[EDDIE51]

Pension credit details here, it is the most under-claimed benefit 1 in 3 who are entitled to it do not claim it.
https://www.gov.uk/pension-credit/overview

[BlackadderV]

If you have 30 years contributions and are unemployed then your pension is not affected. However, if you continue in employment you must pay NI regardless until you reach the age of 65. If you are still in employment after that age, you do not pay NI.

[DTCwordfan]

BA is correct - the one way before to take on a carers role, keep yourself below the tax paying threshold on income and then NI becomes 'waived'. Trust fund income can be considered as pension if that is of any help.....

[buildersmate]

The usual and reliable experts seem to have covered this off for you.
I confirm that I know someone in a very similar situation as you and he is working on the same assumptions as you have made. He doesn't reach State pension age until after 2016, but like you reached 35 years of contributions much earlier. 56 in this case. So he now manages his employed income to ensure it falls below the threshold of paying NI (which frustratingly is less than the basic rate tax threshold these days), and lives off investment income and savings, until he decides to dip into his private pension income.
No point paying into a scheme for zero extra return out.

[Old_Geezer]

Could almost be my twin BM :-)

Thanks to all who've contributed. Unsure how one qualifies for pension credit before any pension has triggered, but I'll look into it should the time come.

Goes to show, don't assume your mate at the pub knows what they're on about :-D

[Tilly2]

Best wishes to you on your eventual retirement. I hope you enjoy every minute. xx

[THECORBYLOON]

As others have said, you may as well make a claim for JSA and get it for up to six months based on contributions.

I don't need to know why you think your employment will end but if it does because you leave voluntarily without a good reason or as the result of misconduct, payment can be sanctioned (i.e. not paid) for thirteen weeks.

[buildersmate]

The answer to your final point about Pension Credit, OG, is that the 'rules' assure that everyone of applicable age get a minimum amount - currently about £148 for a single person of £220 for a couple.
Now, if you are one of those men of an age where a female of the same age (call it P) would be able to get their State Basic Pension before age 65, you may be able to claim pension credit as a stop-gap between age P and age 65.
So, for example, a man whose 65th birthday is in the summer of 2018, doesn't get Basic State Pension until then. But a women gets it in about February 2018. In theory, one could get Pension Credit between the two dates.
However, its means-tested, so you'd have to be not-working (much), not yet drawing private pension and not have investments over £10k.
The third point is the killer.

[EDDIE51]

^^ one other point about pension credit is that if you qualify for even £1 a week you also automatically get maximum possible housing and council tax benefit, as well as free dental treatment and refund of hospital / medical travel costs.
Buildersmate , savings / investment income above £10,000 does not stop pension credit, it is reduced pro-rata for income over £10,000 but you can have an income well over £10,000 and still get a useful amount in pension credit . There was a post last year from someone who had £50,000 investments and still got over £80 a week pension credit.