When can I stop working?

February 22, 2018

Its a harsh, but true, fact that unless you’re sitting on a gold mine, have recently won the Euro Millions (£154 million jackpot this Saturday), we’re all going to be working till we’re at least in our late 60s if not early 70s.  So when it comes to retirement and hanging up the old working hat, how can you be sure that you have paid enough into the system to cover yourself?

In order to receive the full flat- rate state pension (currently £159.55 per week) you need to accrue 35 years of national insurance (NI) credits. It’s easy to find out how many NI credit years you already have: log in to your online personal tax account on gov.uk/personal-tax-account.

If you contracted out of the state pension for any significant period in the past, your predicted state pension entitlement will be smaller, but the maximum pension can be obtained by paying NI for additional years.

Where you have already racked up 35 full years of NI credits and your pension prediction says you qualify for the full pension, why would you pay more?

You may want to protect your entitlement to unemployment support, maternity or sick pay, but if you work for yourself those state benefits are largely irrelevant. Most directors of their own companies pay themselves just enough salary to get an NI credit, but don’t actually pay any NI. If you don’t need the NI credits, you could stop paying yourself a salary.7

Of course we would also advise that you look into setting up your very own private pension fund, if you can afford it, to ensure that there is a little more put away for the all important holiday or two.

Whether you are paying into a private pension pot, or are purely focused on ensuring you pay the minimum NI to get the state pension, we can help you choose the right pension plan and solution that will work best for you and your lifestyle.

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