National Insurance 'contributions' - SV650.org

11-03-06, 11:29 AM

I have to pay Class 2 contributions of £2.10 a week. 'Contributions' is a joke, there is nothing voluntary about it, it's just another tax.

I'm told that I can pay additional voluntary contribs, of £7.55 a week (Class 3) - but I have no idea what this buys.

Anyone know?

11-03-06, 11:57 AM

By the time you and I get round to using it---" Jack ****"

11-03-06, 02:01 PM

Quote:

Originally Posted by Sythree

I have to pay Class 2 contributions of £2.10 a week. 'Contributions' is a joke, there is nothing voluntary about it, it's just another tax.

I'm told that I can pay additional voluntary contribs, of £7.55 a week (Class 3) - but I have no idea what this buys.

Anyone know?

Is that all you have to pay, NI-wise?

11-03-06, 02:09 PM

Quote:

Originally Posted by Sythree

I have to pay Class 2 contributions of £2.10 a week. 'Contributions' is a joke, there is nothing voluntary about it, it's just another tax.

I'm told that I can pay additional voluntary contribs, of £7.55 a week (Class 3) - but I have no idea what this buys.

Anyone know?

isnt it a state pension enhacement?

11-03-06, 02:14 PM

I think it covers state pension contributions and has something to do with benefits should you become unemployed

11-03-06, 03:04 PM

Yes ill go with the Pensions idea - purely because the only AVC's ive heard of are used to top up pension plans.

11-03-06, 03:28 PM

Try on the revenue website. Failing that contact them and ask. Definitely get the right answer than asking on a bikers forum

You can also ask the Pensions team in the revenue for a projection of your state pension. Mine was on £32 a week if I were to retire now, £90 per week at 65.

11-03-06, 06:21 PM

The blurb from the DWP is entirely unintelligible, that's why I asked here. As for 'is that all I have to pay' - oh no!!!!! The £2.10 a week is Class 2. Class 4 then comes out on top of that at the end of the year - same rate as Class 1s for employees.

AFAIK, Class 2s are simply a Tony Blair stealth tax on people who are self-employed

11-03-06, 06:33 PM

Quote:

Originally Posted by Sythree

The blurb from the DWP is entirely unintelligible, that's why I asked here. As for 'is that all I have to pay' - oh no!!!!! The £2.10 a week is Class 2. Class 4 then comes out on top of that at the end of the year - same rate as Class 1s for employees.

AFAIK, Class 2s are simply a Tony Blair stealth tax on people who are self-employed

Wasn't talking about DWP. But HMRC section on NIC:

http://www.hmrc.gov.uk/nic/index.htm may be more understandable and helpful than the DWP.

embee · 12-03-06, 03:54 PM

I'm self-employed too.

As far as I understand things (which isn't much!), you're paying Class2 fixed rate and then Class4 which is income/profit related (just like, oh what's it called, ah yes, INCOME TAX

).

Class3 is as you say a voluntary contribution which maintains pension and bereavement rights for years during which you are not paying other NI contributions which would qualify. The examples the NI give is for students etc.

I'm pretty sure you won't want/need to pay Class3 unless you had time off from employment or self-employment. Even then I'm not sure it's that cut and dried as to whether it's a good investment, depends how long you've got before retirement. If you've got 35yrs to go to retirement (remembering the age will be going up in the meantime!), I reckon you'd be better off investing £350 odd quid a year into something else (which would at least still be yours if you ever wanted it, once given to the government you can kiss goodbye to it).

Remember each full year's contributions only entitle you to something like £2 a week return at current rates.

11-03-06, 11:29 AM	#1
Ed Guest Posts: n/a	National Insurance 'contributions' I have to pay Class 2 contributions of £2.10 a week. 'Contributions' is a joke, there is nothing voluntary about it, it's just another tax. I'm told that I can pay additional voluntary contribs, of £7.55 a week (Class 3) - but I have no idea what this buys. Anyone know?

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11-03-06, 11:57 AM	#2
Dicky Ticker Guest Posts: n/a	By the time you and I get round to using it---" Jack ****"

11-03-06, 02:14 PM	#5
mysteryjimbo Guest Posts: n/a	I think it covers state pension contributions and has something to do with benefits should you become unemployed

11-03-06, 03:04 PM	#6
Anonymous Guest Posts: n/a	Yes ill go with the Pensions idea - purely because the only AVC's ive heard of are used to top up pension plans.

11-03-06, 03:28 PM	#7
secret squirrel Guest Posts: n/a	Try on the revenue website. Failing that contact them and ask. Definitely get the right answer than asking on a bikers forum You can also ask the Pensions team in the revenue for a projection of your state pension. Mine was on £32 a week if I were to retire now, £90 per week at 65.

11-03-06, 06:21 PM	#8
Ed Guest Posts: n/a	The blurb from the DWP is entirely unintelligible, that's why I asked here. As for 'is that all I have to pay' - oh no!!!!! The £2.10 a week is Class 2. Class 4 then comes out on top of that at the end of the year - same rate as Class 1s for employees. AFAIK, Class 2s are simply a Tony Blair stealth tax on people who are self-employed

12-03-06, 03:54 PM	#10
embee Member Mega Poster Join Date: Jul 2003 Location: Warwickshire Posts: 2,804	I'm self-employed too. As far as I understand things (which isn't much!), you're paying Class2 fixed rate and then Class4 which is income/profit related (just like, oh what's it called, ah yes, INCOME TAX ). Class3 is as you say a voluntary contribution which maintains pension and bereavement rights for years during which you are not paying other NI contributions which would qualify. The examples the NI give is for students etc. I'm pretty sure you won't want/need to pay Class3 unless you had time off from employment or self-employment. Even then I'm not sure it's that cut and dried as to whether it's a good investment, depends how long you've got before retirement. If you've got 35yrs to go to retirement (remembering the age will be going up in the meantime!), I reckon you'd be better off investing £350 odd quid a year into something else (which would at least still be yours if you ever wanted it, once given to the government you can kiss goodbye to it). Remember each full year's contributions only entitle you to something like £2 a week return at current rates.