State pension outcasts to receive warning letters

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State pension outcasts to receive warning letters

This is a duplicate of the Blog Entry made on: 23rd June 2016 10:23

Letters will be sent to more than 100,000 people who are set to miss out on the new state pension owing to a lack of contributions.
A rule imposed in April means people need at least 10 years of National Insurance contributions in order to start qualifying for the pension. MPs on the Work and Pensions Select Committee had complained that many would have been unaware of the change. Now the government will write to those affected. The Department for Work and Pensions (DWP) has decided to write to those most at risk "as a one-off exercise" before the end of the year.
Contributions

The letters will go to individuals within nine years of state pension age whose records suggest will have fewer than 10 qualifying years of contributions by the time they retire. "This will test whether direct mail is more effective for this group, given we can identify them and we believe it is possible to formulate a clear message and call to action," the DWP said.The 10-year rule was introduced alongside the new state pension which is being paid to those who reached pension age from April. So it is going to men born after 6 April 1951 and women born after 6 April 1953.....Read more here

[Pixie]

Re: State pension outcasts to receive warning letters

You can check your state pension forecast here

[lookingforward]

Re: State pension outcasts to receive warning letters

I'm self employed and for the last few years have been below the threshold of having to pay class 2 NI. I know that NI is now done as part of the self assessment process but looking around online it seems that for previous years I should have got class 3 NI credits automatically due to the low profit levels which count towards the state pension

You get Working Tax Credit without a disability premium (and you have a small earnings exception if you’re self-employed)

You get Class 3 credits automatically

https://www.gov.uk/national-insuranc...ts/eligibility

Can't recall have the small earnings exemption though and the accountant never mentioned it

Would make a huge difference as I've got a 3 year shortfall to make up in 6 years and that would cover it

[MrsD]

Re: State pension outcasts to receive warning letters

You need to complain to DWP, they are famed for getting this wrong as particularly the older records very much depended on companies, accountants doing their job properly. as a first step I would have a word with the accountant, if he is doing self assessment for you he should be claiming this, very difficult to avoid. If you are earning so little, why are you paying an accountant? I did my own and my daughters who is also self employed, also another couple of family members who are all delf employed, it's not really hard as long as you have all the information to hand.

[lookingforward]

Re: State pension outcasts to receive warning letters

Hi Mrs D,

He's been doing my self assessments for years back from when I was employed, very reasonable too.

Will have a look at the DWP, thanks

[SXGuy]

Re: State pension outcasts to receive warning letters

Hold up. Don't blame the accountant. Up until April 2016 class 2 insurance contributions was a seperate bill that dwp send to you. Has nothing to do with accountants. Until now as quite rightly said it's been merged with self assessment and payable January of each year. Also from April 2018 hmrc are removing class 2 insurance all together but it's not clear as yet what if anything will replace it. It's my belief that it will be merged with a new all round higher rate self employment tax but this hasn't been confirmed yet. And lastly there has been a massive cock up by hmrc over the years where anyone who registers for self employment should have also been registered for class 2 but thousands never were. Myself included. And so there are plenty of us out there who didn't even know they weren't contributing. Oh and I should also mention if your profit is below threshold for class 2 the alternative is voluntary, meaning yes perhaps an accountant should have advised this, but he isn't psychic, the client would first need to ask whether his stamps were still getting paid or not. Remember we work under instruction.

[SXGuy]

Re: State pension outcasts to receive warning letters

On another note. I wouldn't worry to much about doing your own self assessment as the law is changing come April 18.self assessments are being scrapped and being replaced with a digital tax account. If your turnover is more than 10k a year you will be required to hold cloud based accounting software and report your figures quarterly to hmrc via your digital tax account,then adjusting for any capital allowances on a final 5th yearly submission. So if you feel you can cope with all that great. If not, best to keep hold of that accountant.

[lookingforward]

Re: State pension outcasts to receive warning letters

Hi,

I wasn't blaming the accountant, it wasn't part of his remit anyhow he only does the tax returns

I've checked my NI records online and I've got 5 years to pay another 3 years of contributions to qualify for the max I can get