Published On: Mon, May 9th, 2022

State pension warning as Britons could miss out due to part time job roles | Personal Finance | Finance

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Workers with multiple jobs have been warned they may miss out on state pension entitlement under new rules. Plans laid out by the Department for Business Education and Skills (BEIS) have been critiqued by experts.

BEIS has said: “Government will legislate on extending the ban on exclusivity clauses, making them unenforceable in employment contracts where the guaranteed weekly income is below or equivalent to the Lower Earnings Limit, currently £123 a week.”

However, it is worth noting people earning less than that amount may not secure a qualifying year.

With NI contributions and credits vital in building up a state pension entitlement, individuals will need to pay attention to avoid missing out.

Each year a person qualifies is currently worth £275 per year in state pension payouts.

READ MORE: Pension warning as Rishi Sunak to harvest £6billion from savers

Becky O’Connor, Head of Pensions and Savings at interactive investor, said: “Many workers with multiple jobs that each pay less than £123 a week could be aggrieved to find their hard work still does not contribute to their National Insurance record, despite their overall earnings being high enough to qualify if NI was calculated on total income. 

“While their total income across all jobs will be considered for calculating their income tax liability, it doesn’t work that way for National Insurance, which is calculated by individual employers. 

“If workers are eligible for National Insurance credits for other reasons, such as looking after children, then they can build up qualifying years this way, despite earning less than the Lower Earnings Limit.”

The Government’s new plans state they will be giving low paid workers “the flexibility to boost their income through extra work”.

Responding to this, Business Minister Paul Scully said: “We are creating a high skilled, high productivity labour market that supports workers by removing unnecessary red tape, helping the British people boost their incomes and keep more of what they earn.”


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