NI payments for non-employed

You wouldn't *have* to pay NI, but it might be an idea to pay voluntary contributions (IIRC about 7 a week) to build qualifying years for the basic state pension. Whether you should do this or not depends on a myriad of things.

Idle rich? Or perhaps just idle :-)

"Not economically active" seems to be the preferred description.

Can you make these payments retroactively? If so, who do you contact to do so?

Wouldn't that depend on how much capital income you have from your savings?

The fact that you don't have a salary doesn't necessarily mean that you will not be liable for taxes on other income you might have...

Yes, within a time limit.

But first, if I were you, I would complete a BR19 (pension forecast) either online a download a form and post it. The Contributions Office will then send you a letter setting out what your State Pension is worth and what pension you could expect at retirement age, assuming you continue paying contributions.

You need a certain number of years basic contributions to get a full pension, which, if you were able to work for all of your life since school leaving age, would give you about 5 spare years in which you could miss contributions. Some years, (like early years whilst still in education) would not count against you - you would have 'credits' for those year. Similarly, at the other end, if you chose not to be gainfully employed between the age of 60 to 65 then credits are earned and contributions are not due and you would still get a full pension.

When you get the letter you can then work your personal facts out to see if you can afford to miss some years. You will also be told if you are already missing any years.

see:

(if that link breaks up on line-wrap this one should work:

"T S Skogvold" wrote

What's "capital income"??

"Terry Harper" wrote

Ermmmm - if he's "living off his savings", then he must be *spending* them on something. Isn't that economic activity?

"Terry Harper" wrote

Preferred by whom?

Which is actually a bloody good deal. Class 3 contributions of £361 pa increases your basic pension by 2-3% £85-128, a yield of 24-35%

Brian - the state/S2P bible is The Pension Service guide NP46.

Daytona

but how much does it increase your pensionable income once you take into account means tested benefits?

Jim.

By the same amount; the basic pension isn't means tested.

Daytona

No, but if you don't get a full basic pension, you get other means tested benefits instead...

Jim.

Thanks David, I'll have a look into that now.

IIRC, if the state pension is your *only* income in retirement (and you're below the capital limits etc), then any pension you've lost out on through not having a full state pension gets replaced by the pension credit pound for pound!

There is a calculator on the government pension web site:

So... does that mean that there's no real point in me trying to get my NI contributions paid up if I'll effectively get a pension anyway at the end of it? May as well save my contribution money and spend it on fast cars and loose women :)

Is the basic state pension going to be your *only* income? Do you have no occupational pension etc? SERPS? Will you have no savings? Be sure to understand the rules - have a read of NP46 referenced in this thread and use the government pension site. Also bear in mind that means tested benefit rules can change (there again so can state pension rules). Also if you intend retiring abroad you won't get UK means tested benefits, but you'll probably get the state pension (although often frozen, depending on the country you retire to).

Presumably he means income from capital, i.e. interest. This is taxable, but not subject to NI. Tax is already deducted at source, of course, unless you can assure them that your total income is too low to tax. But if he has enough capital to live off, chances are his interest will exceed the personal allowance.

Thanks for the many replies.

For what it's worth, after doing some research it seems what I'm talking about is a sabbatical - taking a year out from professional life in order to do something else. Except that I don't intend to do very much :)

I'm not sure if the government makes any official provision for people taking a sabatical. I don't see why they would have to.

It appears to be counted as inactivity.

The Census people.

self employed contributions are less btw