We are accountants and tax advisers, and we do not get involved in pension matters. However, this is what we know about the interaction between National Insurance Contributions and the UK State Pension.
If you are following our recommended director shareholder payments pattern, then your salary should be high enough to give you a National Insurance credit, even though you don’t pay Class 1 National Insurance.
A full year at this level is a “qualifying year”. This page https://www.gov.uk/state-pension/eligibility used to say:
“You might not pay National Insurance Contributions because you’re earning less than £XXX a week. You may still get a qualifying year if you earn between £YYY and £XXX a week from one employer.”
However, the rules keep changing and at the moment the “eligibility” explanation on the Government site takes you round in circles and no longer explains the position for paid employees and directors on low salaries.
If you want the relevant information, the best thing you can do is a twofold approach:
Firstly
Write (with your NI number) to . . .
National Insurance Contributions Office
Benton Park View
Newcastle Upon Tyne
NE98 1ZZ
. . . and ask for a copy of your National Insurance record for all years since [date of your sixteenth birthday] showing contributions paid and any credits received.
Secondly
Complete a Form BR19 and send it to . . .
The Pension Service
Newcastle Pensions Centre Futures Group
Mail Handling Site A
Wolverhampton
WV98 1LU
Once you have the two replies, check that the number of “qualifying years” is the same on both documents. If there is anything that you think needs attention, write to the National Insurance Contributions Office again seeking help, particularly if credits are missing for qualifying years.
Lastly, you won’t get your State Pension automatically, you have to claim it. You should receive a letter 4 months before you reach State Pension age, telling you what to do. Put a note in your diary now, for 3 months before you reach State Pension age, in case that letter doesn’t turn up.