As the NI threshold now pretty much matches the personal allowance what would be the impact on a directors state pension if their salary remained at £12.5k and they made no NI contributions? Would they be entitled to a state pension if making no NI contriubtions over an extended length of time?
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I certainly hope no
None of my client sole directors pay any NI
Very few of companies with plural directors pay any NI particularly when they have other income.
But OP needs to understand (as I'm sure you do) that director, or indeed *any* employee, needs to have sufficient income to breach the required threshold in order to generate a qualifying year (subject to all the other rules).
Pedantic point: this does NOT automatically mean the employee will "be entitled to a state pension" - merely that, as you've pointed out, there is no direct correlation between paying NICs and eventual receipt of a state pension (or other benefits).
Agree
But directors are fairly easy to get sorted for a qualifying year if using the annual basis
Employees on part time work paid weekly gives more opportunity for a posible shortage
Well, you all say it'll be grand but Helen Morrissey, Senior Pensions and Retirement Analyst at Hargreaves Lansdown, says you need to pay NI every year.
https://www.express.co.uk/finance/personalfinance/1626279/state-pension-...
To be fair, you've fallen for click-bait:
* The reporter says "If a person earns an amount too low to pay National Insurance they may not contribute enough towards a state pension. It could leave them with gaps in their record, and thus less than they perhaps expected when they reach retirement."
* But Helen (who I don't know) actually says "Ordinarily a worker should receive an NI credit even if they earn below the threshold as long as they have earnings of more than £120 per week or £6,240 per year. However, it is worth checking to make sure this is the case."
Judicious use by the reporter of 'may not' and 'could' - which are then left out of the headline-grabbing aspects!
So basically, Hugo, if I earn less than £500000 a year, I could be earning less than £6240 a year.
Definitely worth checking............
I thought this was deliberately a tongue in cheeck response. Good one.
Read the link. Assumed a short news day. Deliberately misleading headline. Likely to mislead anyone who does not undestand how it works. A better article would have said that it is a good idea to check your pension forecast once every three years to confirm that all credits are recorded.