State Pension Entitlement – Directors

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State Pension Entitlement – Directors

To earn a years ‘stamp’ towards the state pension you need to be paying at or above the lower earnings limit for NI. Even though between the lower limit and the upper limit you do not physically pay NI you still earn your ‘stamp’ for the year provided you earn more than the lower earning limit.

For the current tax year (2013/14) this is £109 per week so annual rate of £5,668. In the current tax year you will earn £7,055 so you will get the entitlement for this year.

This means you can take advantage of the tax efficiencies of paying yourself through your Limited company payroll whilst still knowing that you will gain your entitlement to state pension (for what that’s worth when you come to retire!).

To qualify for a full state pension you have to earn 30 years entitlement across your working life. I know you can get an estimate online to check where you are  https://www.gov.uk/state-pension-statement

Disclaimer

The information contained in this article is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. The application and impact of laws can vary widely based on the specific facts involved. Given the changing nature of laws, rules and regulations, and the inherent hazards of electronic communication, there may be delays, omissions or inaccuracies in information contained in this article. Accordingly, the information on this article is provided with the understanding that the authors and publishers are not herein engaged in rendering legal, accounting, tax, or other professional advice or services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser.

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