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Post Info TOPIC: How much is paying HMRC pension for self employed at the retirement age ?
Adrian99


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How much is paying HMRC pension for self employed at the retirement age ?
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Hello !

A sole trader asked me how much he will received state pension if his income is around £10,000 e year. 

I ve told him that he has to pay 465.35 (calculated above) for 2012/2013 but I did not knew what to say about the state pension when he will be retired. 

Class 2 NIC: 2.65 X 52 weeks = £ 137.80

Class 4 NIC (10,000 - 7605) X 9% = £ 215.55

Tax (10,000 - 9440) X 20 % = £ 112

Total  465.35

 

Please if someone could help me: how the state pension is calculated and what would it be the value ?

 

Have a nice day. 

 

Adrian 

 

 



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Stardoe


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Hi Adrian,

The State Pension is based on how many years you have contributed, not how much you have earned or paid in NI. You currently need 30 years of contributions (or credits for NI if you have been on any benefits).

Take a look here:- https://www.gov.uk/state-pension/eligibility



-- Edited by Stardoe on Monday 3rd of June 2013 09:43:04 PM

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Pauline
Adrian99


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Thank you Pauline.
I have checked the site and the maximum pension is £110.15 per week.

Have a lovely evening

Adrian



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This is just my personal opinion. Advice should be sought from a suitably qualified Accountant.

 

P.S. I only ride a motorbike because I want to dry my clothes faster 
ClawzCTR


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But there are things that get added to it and taken off Adrian... I've only seen a few DWP letters (state pension) that are the same.

Your client will get a letter every year about what they get and how much the increase will be. It is very much 'how long is a piece of string' situation im afraid...

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Gary

W: www.backtoblackbooks.co.uk    E: gary@backtoblackbooks.co.uk     t: @backtoblackBK
Adrian99


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Thank you, Gary,

To, this means that if he only pays class 2 NIC he will not be entitled to £110.15 per week (after 30 years of contribution) ?

Many thanks,

Adrian


__________________

This is just my personal opinion. Advice should be sought from a suitably qualified Accountant.

 

P.S. I only ride a motorbike because I want to dry my clothes faster 
ClawzCTR


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If he pays in very little then i doubt he will get very much in return...
May be worth him investing into a private scheme if they are that worried about it....

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Gary

W: www.backtoblackbooks.co.uk    E: gary@backtoblackbooks.co.uk     t: @backtoblackBK
Adrian99


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Thank you Gary,

I found this on hmrc site:
Class 2 contributions count towards certain benefits, like the basic State Pension, Maternity Allowance and Bereavement Benefit.
Class 4 National Insurance contributions don't count towards benefit entitlements

The (potential) client wanted to know if he can have some benefits from the money he gives for nic.

Have a lovely evening !

Adrian



__________________

This is just my personal opinion. Advice should be sought from a suitably qualified Accountant.

 

P.S. I only ride a motorbike because I want to dry my clothes faster 
Stardoe


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Here's another useful link:-

http://www.hmrc.gov.uk/ni/intro/benefits.htm#2

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Pauline
Adrian99


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Thank you Pauline.
The table is really helpful.

Have a lovely evening.

Adrian

__________________

This is just my personal opinion. Advice should be sought from a suitably qualified Accountant.

 

P.S. I only ride a motorbike because I want to dry my clothes faster 
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