To qualify for the full, new State Pension you will need to have 35 years of contributions. At present, the self-employed pay Class 2 (a fixed weekly amount of £2.85) and Class 4 contributions (9% of profits between £8,164 and £45,000, and 2% of profits over £45,000), but only the Class 2 payments contribute towards your 35 years.<\/p>\n
From April 2018, Class 2 contributions are being abolished.<\/p>\n
It is likely that from April 2018, if you are self-employed and earn more than the small profits limit (SPL), currently £6,025 for 2017-18, but less than the current lower profits limit (LPL), £8,164 for 2017-18), you will not have to pay Class 4 NIC but you will still receive credits towards your new State Pension entitlement.<\/p>\n
Thus far good news for the lower paid self-employed.<\/p>\n
Unfortunately, the news is not quite so good if you earn less than the SPL threshold. Up to April 2018, you could top up your State Pension contributions by making Class 2 contributions, at £2.85 per week. From April 2018, you would need to make Class 3 voluntary contributions, and these are currently £14.25 a week.<\/p>\n
The annual cost of protecting your State Pension rights would therefore increase from £148.20 to £741.<\/p>\n
Self-employed with income below the SPL may be able to achieve the same result if they are claiming other benefits: for example, tax credits, child benefit or Universal Credit. If this is the case they would not need to pay the Class 3 contributions and would still receive credits towards their State Pension entitlement.<\/p>\n","protected":false},"excerpt":{"rendered":"
To qualify for the full, new State Pension you will need to have 35 years of contributions. At present, the self-employed pay Class 2 (a fixed weekly amount of £2.85) and Class 4 contributions (9% of profits between £8,164 and £45,000, and 2% of profits over £45,000), but only the Class 2 payments contribute towards […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[1],"tags":[],"class_list":["post-3097","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/posts\/3097","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/comments?post=3097"}],"version-history":[{"count":0,"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/posts\/3097\/revisions"}],"wp:attachment":[{"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/media?parent=3097"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/categories?post=3097"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/tags?post=3097"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}