Two reasons. One was I was trying to roughly work out whether (as someone now earning at or below the NI threshold) it was worth me paying voluntary NI contributions rather than putting £13.25 per week into some form of retirement saving (personal pension or ISA or whatever).
[In the end I struggled with what you might call the actuarial assumptions and put the calculation to one side. (Will there be a state pension when I retire? Will it be the same level it is now, or less? What would be a reasonable expectation of investment growth over the next 25 years in a) equities b) gilts? What will annuity rates be like in 25 years? That sort of thing. For once I didn't go so far as to make a spreadsheet, but my gut feel ceteris paribus is that £13.25 a week is actually a good deal for the current state pension but that there are certainly some plausible future positions of the assumptions that would make it less so. Since this is definitely more your field than mine, feel free to offer any advice...]
Oh, and the second reason is that my mother has always referred to this as 'stamp' and still does. In 18 years of accountancy, I've never met anyone else who uses this term (although admittedly I've never gone near payroll taxation). If anything, it's confusing when there is a completely different tax called 'Stamp Duty'. My impression is that this was a very archaic term dating back to when contributions were literally recorded with the purchase of special National Insurance stamps. My mum is 66 years old, but mostly not senile...
I was looking at this for a client recently. It's £660 or so to get about £150 of pension per annum, which is a good deal.
However, you only need 30 years of contributions to get full state pension and anything after that is wasted makes no difference. You probably have about 20 now, and nearly 30 years to get the remaining 10 or so. If you voluntarily pay now, and then pay employment or self-employment contributions in more years than you need, the voluntary ones would be better off in a private pension.
You can probably ignore voluntary contributions for the next 15 years or so at the very least.
Yeah, that was pretty much where I was heading. I think I have 19 years now. Of course that brings another assumption into play - that the requirement stays at 30 years, but I think I'll take those odds.
I'm not going to fill in the poll, because I'm retired, but we always referred to 'National Insurance' or NI. (That I was working first for HM Customs and Excise and latterly for HMRC might have something to do with this...)
Immigration place a restriction on my visa saying that I am not eligible for public funds. - this includes statutory sick leave and probably maternity pay (I say probably, because it's so new, no one has challenged it yet) The thing is... The tax office doesn't recognise my right (forced or not) to exist outside the NI system, so they tax me anyways.
That's interesting (and I must admit, something I didn't know). People of my mother's generation, who were indoctrinated to believe that the State will provide just so long as you pay your 'Stamp' often seem to think that NI contributions are some form of insurance scheme and not just an income tax under a different name. Clearly for you that is most definitely not the case.
*nods* That's how it works in Australia. almost everyone pays an annual levy (about $300), but there are a couple of ways that people will qualify as exemptions to this. (if you are under 16, for example, but there are more.) If you earn less that $70k a year, then that's all you pay. If you earn more, then every dollar over the threshold is taxed at the surcharge rate. If you want to opt out of the tax, then you can get private health insurance to cover the costs of your treatment and you put down those details. And you don't have to pay, if you are not eligible to Medicare benefits! http://www.ato.gov.au/content/00250854.htm The only reason I get healthcare here under the NI is because I still pay my Medicare back home. And our governments have a reciprocal agreement. It's supposed to be comparable cover, but I have to pay full price for my medication here, whereas I get it at a subsidised rate back home, because I am considered to be someone with a complex chronic health condition.
And just to clarify, in case anyone misunderstands... I am not looking for a free hand-out. I am not complaining that I don't get a free hand-out - I just want to be treated the same as everyone else.
I call it a stamp, but mostly when paid at the minimum level to count as a year's worth of contributions, such as a director taking about £7,500 of salary. For the most part I call the amounts NI contributions, NI, or NICs.
This will no doubt please my mum ("king_pellinor uses the word "stamp", and he's a CTA...") and denies me the opportunity to tease her for being old-fashioned.
Though, to be honest, I suspect I actually refer to them (rather than skimming my pay slip and thinking "looks much like last month, is probably OK") less than once a year so I couldn't speak with certainty about exactly what I would say.
In the context of the "will SAHM's from HRT families lose their carer's pension entitlement if they give up CHB?" discussion I've seen "stamp" used quite a lot recently, but I personally use "NI".
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timeasmymeasure
no subject
Date: 2012-11-27 03:03 pm (UTC)ETA: Why do you ask?
no subject
Date: 2012-11-27 04:06 pm (UTC)[In the end I struggled with what you might call the actuarial assumptions and put the calculation to one side. (Will there be a state pension when I retire? Will it be the same level it is now, or less? What would be a reasonable expectation of investment growth over the next 25 years in a) equities b) gilts? What will annuity rates be like in 25 years? That sort of thing. For once I didn't go so far as to make a spreadsheet, but my gut feel ceteris paribus is that £13.25 a week is actually a good deal for the current state pension but that there are certainly some plausible future positions of the assumptions that would make it less so. Since this is definitely more your field than mine, feel free to offer any advice...]
Oh, and the second reason is that my mother has always referred to this as 'stamp' and still does. In 18 years of accountancy, I've never met anyone else who uses this term (although admittedly I've never gone near payroll taxation). If anything, it's confusing when there is a completely different tax called 'Stamp Duty'. My impression is that this was a very archaic term dating back to when contributions were literally recorded with the purchase of special National Insurance stamps. My mum is 66 years old, but mostly not senile...
no subject
Date: 2012-11-27 05:08 pm (UTC)However, you only need 30 years of contributions to get full state pension and anything after that
is wastedmakes no difference. You probably have about 20 now, and nearly 30 years to get the remaining 10 or so. If you voluntarily pay now, and then pay employment or self-employment contributions in more years than you need, the voluntary ones would be better off in a private pension.You can probably ignore voluntary contributions for the next 15 years or so at the very least.
no subject
Date: 2012-11-27 06:58 pm (UTC)no subject
Date: 2012-11-27 06:25 pm (UTC)I may return to the actuarial aspects at some later point.
no subject
Date: 2012-11-27 03:35 pm (UTC)no subject
Date: 2012-11-27 04:38 pm (UTC)Immigration place a restriction on my visa saying that I am not eligible for public funds. - this includes statutory sick leave and probably maternity pay (I say probably, because it's so new, no one has challenged it yet)
The thing is... The tax office doesn't recognise my right (forced or not) to exist outside the NI system, so they tax me anyways.
no subject
Date: 2012-11-27 05:02 pm (UTC)no subject
Date: 2012-11-27 07:32 pm (UTC)That's how it works in Australia.
almost everyone pays an annual levy (about $300), but there are a couple of ways that people will qualify as exemptions to this. (if you are under 16, for example, but there are more.)
If you earn less that $70k a year, then that's all you pay.
If you earn more, then every dollar over the threshold is taxed at the surcharge rate.
If you want to opt out of the tax, then you can get private health insurance to cover the costs of your treatment and you put down those details.
And you don't have to pay, if you are not eligible to Medicare benefits!
http://www.ato.gov.au/content/00250854.htm
The only reason I get healthcare here under the NI is because I still pay my Medicare back home. And our governments have a reciprocal agreement.
It's supposed to be comparable cover, but I have to pay full price for my medication here, whereas I get it at a subsidised rate back home, because I am considered to be someone with a complex chronic health condition.
And just to clarify, in case anyone misunderstands... I am not looking for a free hand-out. I am not complaining that I don't get a free hand-out - I just want to be treated the same as everyone else.
no subject
Date: 2012-11-27 07:50 pm (UTC)no subject
Date: 2012-11-27 05:03 pm (UTC)no subject
Date: 2012-11-27 06:59 pm (UTC)no subject
Date: 2012-11-27 05:03 pm (UTC)no subject
Date: 2012-11-27 08:01 pm (UTC)no subject
Date: 2012-11-27 11:12 pm (UTC)