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In order to receive a full UK State Pension you must accrue enough "Qualifying Years".

  • I (think that!) I understand how qualifying years work if you're just employed.
  • And I (think that!) I understand how qualifying years work if you're just self-employed.
    • In particular, if you're below an earnings threshold, your Class 2 NICs are not compulsory, so you are permitted to just not pay Class 2 NICs. But if that were your only income then the consequence would be that in that year you haven't qualified ... and thus you might choose to make a Voluntary Class 2 NIC, in order to still qualify for that year.

This is documented here: https://www.gov.uk/new-state-pension/your-national-insurance-record-and-your-state-pension#qualifying-years-if-youre-working

What I'm not at all clear on (and can't find any commentary on, anywhere) is how these 2 cases interact if you're doing both?

The Tax Return form is very clear that you can choose not to pay the Class 2 NICs ... but I can't tell what that's doing to the qualifying year?

I can easily imagine either of the following interpretations:

  • You've paid "your dues" via PAYE Class 1 NICs, so you're all good ... you've already qualified.
  • You may have paid Class 1, but you didn't pay your Class 2, so you haven't paid your full NI dues ... you so don't qualify this year.

How does it work?

Bonus points for a reference to a .gov.uk source for the answer!

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  • I think it's likely that if you've qualified, then you've qualified. The key thing is that you make qualifying payments - either Class 1 or Class 2. The page you link to doesn't say " if you are self employed you need to pay Class 2". It says "if you are not working you may want to pay Class 2". If you are both working and self-employed then you are working. Jan 9 at 22:22
  • @DJClayworth ... make qualifying payments - either Class 1 or Class 2 ... except that's not what that page says. It doesn't say "OR". It says (paraphrased) "If you're employed and pay Class 1. If you're self-employed and pay Class 2." It doesn't say how those 2 statements interact if you're both.
    – Brondahl
    Jan 10 at 0:55
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    There are so many ways you can get qualifying years (also things like being in receipt of child benefit) that I'd be amazed if "there was one way you could have qualified but didn't" knocks out all the others. But a useful answer really wants an authoritative source. Jan 10 at 8:11
  • The National Insurance helpline is very helpful and will tell you what years you have qualified for and how much you would need to pay to qualify for the other years. My husband just went through something very similar to all this and although he had to stay on hold for ages, it was all resolved clearly and without complication. In theory you might be able to use their online agent for the same thing as well, but i haven't tried that. gov.uk/government/organisations/hm-revenue-customs/contact/…
    – Vicky
    Jan 10 at 12:25
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    "How do these 2 different rules apply when both pre-conditions are true?" is the entirety of my question. Just replying "well obviously <this> one takes precedence" with no source or authority reference isn't helpful.
    – Brondahl
    Jan 10 at 14:58

1 Answer 1

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You don't have to do both, in order to qualify; EITHER ... OR is fine.

If your employment is adequate to qualify you for NI in its own right... AND you are also self-employed but choose not to pay Voluntary Class 2 NICs ... then you have still completed a qualifying year of NI.

Confirmed by 2 Sources:

  • 1 colleague who spent 10+ years working in the Civil Service, in Tax Policy.
  • 1 friend who was in this boat in the 2021-22 tax year, declined Voluntary NICs on their Tax Return and has checked their NI record which reports that they did complete a full qualifying year in that year.

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