Part-time work and your State Pension

May 9, 2024

Understanding NI Contributions

When working part-time, your primary concern may be if and how it impacts your state pension. It's crucial to know that your part-time work status doesn't directly prevent you from receiving your State Pension in the future. The key factor here is National Insurance (NI) contributions, which are payments made based on your earnings to qualify you for certain state benefits including the State Pension.

If your earnings exceed £242 per week in part-time work, you will generally accrue NI contributions. However, if you earn below this threshold, you might not accrue contributions for that period. But don't worry, there are ways to address gaps in your NI record.

Credits and Voluntary Contributions

For those who earn less or take time off for reasons like childcare or job seeking, you might be eligible for NI credits, which also count towards your State Pension eligibility. These credits can fill in when your direct contributions are insufficient.

In some scenarios where there are still gaps or to enhance your eventual State Pension, making voluntary NI contributions is an option. It's a useful step if you've experienced varied periods of part-time work or have other gaps in your employment history.

Auto-Enrolment and Employer Contributions

Even as a part-time worker, most employees are covered by auto-enrolment, meaning your employer automatically sets up a pension scheme for you. If your income from part-time work exceeds £10,000 a year, you're automatically enrolled. For earnings between £6,240 and £10,000, you can opt into the scheme, and your employer must contribute.

These contributions from your employer, sometimes matched further if you pay more into the scheme, can significantly boost your retirement savings. It's highly recommended to leverage these opportunities, as they can help supplement your State Pension.

Keep an Eye on Your Pension

Lastly, always keep track of your pension status. Regularly checking your NI record and understanding your accumulated pension can help ensure that you're on the right path to securing a comfortable retirement. If there are gaps, consider measures like voluntary contributions or optimising your workplace pension contributions.

Over to you

While part-time work may pose challenges in accumulating continuous NI contributions, there are several measures like credits, voluntary contributions, and maximising employer contributions through workplace pensions that can help mitigate this risk. Check your National Insurance record at Gov.uk to be sure where you stand.

SOME IMPORTANT THINGS YOU SHOULD KNOW
Pensions are long terms investments. It’s important that you know the value of your investment could go up as well as down. You could get back less than you put in. Past performance is not necessarily a guide to the future and pension investing is not intended to be a short-term option. Penny does not provide financial advice so please be sure that this investment is right for you.

Your current pension might have special benefits that will be lost if you transfer to Penny. These special benefits include: Guaranteed Annuity Rate (GAR), Guaranteed Bonus Rate (GBR), Guaranteed Minimum Pension (GMP) and Protected Tax Free Cash (PFTC) over 25%. If this is the case, we will not transfer your pension, as you may be better off not transferring in these cases.

Your current provider might charge you a transfer-fee to transfer your pension to Penny. If this is the case, we will not transfer your pension, as you may be better off not transferring in these cases.

You should consider the charges and benefits before transferring your old pensions to your new plan, and consider whether the risk and reward profile of the investments offered matches your needs. It may be that your current provider has lower fees than Penny - where this is the case, we recommend that you carefully consider whether to transfer your pension to Penny, as you may be better off not transferring in these cases.

If you are in any doubt about proceeding you should contact a financial adviser.
© Copyright 2024 Penny Technology Limited. Company registration: 11999643. FCA Reference Number: 931299.
SOME IMPORTANT THINGS YOU SHOULD KNOW
Pensions are long terms investments. It’s important that you know the value of your investment could go up as well as down. You could get back less than you put in. Past performance is not necessarily a guide to the future and pension investing is not intended to be a short-term option. Penny does not provide financial advice so please be sure that this investment is right for you.

Your current pension might have special benefits that will be lost if you transfer to Penny. These special benefits include: Guaranteed Annuity Rate (GAR), Guaranteed Bonus Rate (GBR), Guaranteed Minimum Pension (GMP) and Protected Tax Free Cash (PFTC) over 25%. If this is the case, we will not transfer your pension, as you may be better off not transferring in these cases.

Your current provider might charge you a transfer-fee to transfer your pension to Penny. If this is the case, we will not transfer your pension, as you may be better off not transferring in these cases.

You should consider the charges and benefits before transferring your old pensions to your new plan, and consider whether the risk and reward profile of the investments offered matches your needs. It may be that your current provider has lower fees than Penny - where this is the case, we recommend that you carefully consider whether to transfer your pension to Penny, as you may be better off not transferring in these cases.

If you are in any doubt about proceeding you should contact a financial adviser.
© Copyright 2024 Penny Technology Limited. Company registration: 11999643. FCA Reference Number: 931299.
SOME IMPORTANT THINGS YOU SHOULD KNOW
Pensions are long terms investments. It’s important that you know the value of your investment could go up as well as down. You could get back less than you put in. Past performance is not necessarily a guide to the future and pension investing is not intended to be a short-term option. Penny does not provide financial advice so please be sure that this investment is right for you.

Your current pension might have special benefits that will be lost if you transfer to Penny. These special benefits include: Guaranteed Annuity Rate (GAR), Guaranteed Bonus Rate (GBR), Guaranteed Minimum Pension (GMP) and Protected Tax Free Cash (PFTC) over 25%. If this is the case, we will not transfer your pension, as you may be better off not transferring in these cases.

Your current provider might charge you a transfer-fee to transfer your pension to Penny. If this is the case, we will not transfer your pension, as you may be better off not transferring in these cases.

You should consider the charges and benefits before transferring your old pensions to your new plan, and consider whether the risk and reward profile of the investments offered matches your needs. It may be that your current provider has lower fees than Penny - where this is the case, we recommend that you carefully consider whether to transfer your pension to Penny, as you may be better off not transferring in these cases.

If you are in any doubt about proceeding you should contact a financial adviser.
© Copyright 2024 Penny Technology Limited. Company registration: 11999643. FCA Reference Number: 931299.