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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15916
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Hello Can you help. I am 50years old and have worked full

Resolved Question:

Hello

Can you help. I am 50years old and have worked full time paying tax & NI since I was 16. This means I have put in my 30 years to qualify for a full pension. I have been advised that if I work until I'm 67 I will not get any extra State Pension. This means I am working got the next 17 years, paying tax & NI for no extra state pension. is there any way I can opt out of paying tax?

Thank you
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.
Hi.

The only way you can avoid paying tax is to keep your income below the personal allowance of £10,000 or leave the UK. I'm in exactly the same position as you. I have my 30 plus qualifying years for state pension purposes but won't get my state pension until I'm 67 and I still work. The tax you pay has nothing to do with state pension entitlement.

Your NIC payments give you entitlement to state pension and some state benefits such as jobseeker's allowance, some other benefits and access to the NHS. It is just tax by another name and the government is looking into merging it with tax. Take a look here for information on national insurance.

I'm sorry I cannot give you any good news. Let me know if you have any further questions.
Customer: replied 3 years ago.

Thanks for that I always thought it was my tax that paid my state pension. So even if I took out an additional private Pension, I already pay 6.5% of my salary into my works pension. I would still need to pay full NI


 


What is serps? I seam to remember when I was about 18 I reduced my tax and serps/contracted out was discussed?

Expert:  TonyTax replied 3 years ago.
You get tax relief for pension contributions but not relief from NIC.

SERPS is the State earnings Related Pension Scheme. It replaced graduated pension in 1977 or thereabouts and was designed to give those on higher earnings a top up to the basic state pension. You can read about it here.
Expert:  TonyTax replied 3 years ago.
I have to go out for a while but I will be back in about 90 minutes in case you have any further questions.
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