State Pension Warning on National Insurance Limits

Published / Last Updated on 24/03/2022

In his Spring Statement (mini budget) on 23/03/22, the Chancellor Rishi Sunak announced he is lifting the National Insurance lower earnings limit threshold by just over £3,000.  The current threshold £9,568 will be rounded up to £12,570pa earnings before national insurance contributions are made i.e., brought in line with the tax-free income Personal Allowance of £12,570.

In short, if you earn below or up £12,570pa, equivalent to £1047.50 per month or £241.73 per week, you pay no national insurance contributions and no income tax om your pay.

State Pensions at Risk?

To receive a full UK State Pension, you need to have accrued 35 years national insurance credits.  This is either through payment of national insurance on your pay or credits to NIC via home responsibilities protection such as not in paid employment looking after children (must be in receipt of Child Benefit), being a carer with carers allowance, be unemployed, on universal credit benefits or indeed in jail.

If you are do not qualify for any of the NIC credits protection and are working and earning below £12,570 pa, you will not accrue a credit towards your state pension next year.

You may wish to consider:

Opening a Personal Tax Account with HMRC so that you can check how many years credits you have built up:

Consider making voluntary Class 3 National Insurance Contributions to top up any gap years:

If you need help, please do not hesitate to contact the relevant authorities, or contact us.

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