Paying National Insurance inbetween contracts

[pickle1000]

Hi guys,

I'm taking abreak from contracting for afew months to do abit of travelling and wondering do I need to pay national insurance contributions during this time so that my state pension isn't affected?

[Clare@InTouch]

It depends on what earnings you've had in the year and how many years you already have counted toward the pension.

You could always continue paying yourself the lower salary amount whilst you're away, assuming you have enough money in the company.

[IR35 Avoider]

You don't have to pay any NI to maintain your contribution record, you just have to pay the right (low) amount of salary for the tax year.

[pickle1000]

I should also mention that I'm paid through an umbrella company so don't have the option to keep paying myself whilst I'm not working.

[Jessica@WhiteFieldTax]

You need 30 qualifying years of NI payments to get a full state pension. If you are short you can buy more years with voluntary contributions (under current rules) nearer retirement date.

Getting a definition of "qualifying year" is a pig in the on the .gov or HMRC websites, but two good links I found are:

Qualifying for Basic State Pension | Rights 4 Seniors

Should I Make up my National Insurance Contributions? | money.co.uk

Basically to be a qualifying year you need to have paid Ni on £5564 of income - that's 12/13 rates CBA to look up 13-14, but won't be vastly different.

It may well be that your income via the brolly is enough year to date to cover this.

[IR35 Avoider]

I think the 30 qualifying years is being increased to 35 years.

Since you can't really control salary, it is probably reasonable to do nothing. If you've paid any NI in the year you've probably done enough, and if you haven't you should get a letter inviting you to make a voluntary contribution.

[pickle1000]

Everything you both mentioned suits me.
Thanks for the info guys!