Opt out of state pension/NI - possible?

[d000hg]

I have a feeling this is a silly question, but can you choose to opt out of a state pension altogether? We contractors often arrange our salary so as to be eligible for one without paying anything (I can't remember why that works) but can you opt out of NI if you don't want any government support after retirement?

(nothing to do with contracting but I thought in General we would get distracted by people calling each other lefties within about 2 posts).

[Scrag Meister]

I contracted out of SERPS in 1987.

This is NOT a full opt out and some still goes through there but the rest goes to another scheme, run by AXA if I remember correctly.

[SueEllen]

NI is a social tax which *pays for other benefits i.e. job seekers, employment and support allowance, and the NHS as well as the state pension.

So you can't actually opt-out of it.

If you go abroad to an EU and some EEA countries your social tax contributions there count towards the UK pension.

*It just goes into the General Taxation pot like all other taxes.

[mudskipper]

I contracted out of SERPS in 1987.

This is NOT a full opt out and some still goes through there but the rest goes to another scheme, run by AXA if I remember correctly.

WHS, then the advice changed so I opted in again. Never really understood it if I'm honest.

[d000hg]

NI is a social tax which *pays for other benefits i.e. job seekers, employment and support allowance, and the NHS as well as the state pension.

Is that the official position, or your real-world analysis of what they actually use it for?

[eek]

Is that the official position, or your real-world analysis of what they actually use it for?

did you not follow the star to the footnote underneath

*It just goes into the General Taxation pot like all other taxes.

[d000hg]

did you not follow the star to the footnote underneath

My question stands, now applied to that footnote

[SarahL2012]

I have a feeling this is a silly question, but can you choose to opt out of a state pension altogether? .

No - NIC is a tax like PAYE. Its just by calling it a 'contribution' you're not supposed to think of it as a tax.

You used to be able to opt out of SERPs, but I think that's stopped now as well.

[SueEllen]

No - NIC is a tax like PAYE. Its just by calling it a 'contribution' you're not supposed to think of it as a tax.

You used to be able to opt out of SERPs, but I think that's stopped now as well.

SERPS became the State Second Pension, and due to the pensions mis-selling scandal in the 90s loads of schemes advised members to opt in to it.

Also due to the reciprocal agreements on social benefits with EU and some other countries, NI would still have to be separated out from income tax in some way.

It's legal for you and your employer to pay your NI in your home country if they send you abroad for 1 to 5 years.

[IR35 Avoider]

You used to be able to get a small reduction in NI/rebate of NI by opting outing out of SERPS (also known as state second pension) but that option has now been removed and in the latest change announced earlier this month that pension is being abolished altogether.