Is it Worth Topping up NI contributions?

Newsletter issue - July 07.

Paying National Insurance contributions (NICs) builds up your entitlement to the state retirement pension, and to certain social security benefits, such as the jobseekers allowance, if you lose your job. However to receive most benefits you must have a complete NI record covering at least two tax years, and to get a full state retirement pension you must pay NICs (or been credited with them) for up to 40 years.

If you don't pay NICs for a significant period, because you are studying, travelling, bringing up children, or caring for relatives, your NI record will have gaps. However some state benefits such as the carers allowance or child benefit, should plug these gaps with NI credits, but that credit system does not always work perfectly.

The Taxman's computer system should automatically send you a letter if you have a gap in your NI contributions. The letter recommends that you pay some voluntary NI contributions to complete your NI record for a certain tax year. If you receive such a letter ask us to check the details. Even if do you have a gap in your NI record you may be better off contributing extra funds into an independent pension scheme, rather than paying more for your state pension. It all depends on your personal circumstances and your retirement plans.

What our clients say about us...

  • "Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."

    ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT

  • "I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."

    Neil Price - Managing Director at Work Relief Charity Recruitment

  • "Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"

    Lee Westrap MBCS - Director - Bulldog IT Services

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Booth & Co  |   The Hermitage  |   15a Shenfield Road  |   Brentwood  |   Essex  |   CM15 8AG        Telephone: 01277 224666    |   Email: info@boothandco.co.uk