Good evening all,
First post here, its going to be a little long winded but necessary for anyone willing to help. Here goes.
I'm fifty nine years old therefore my state pension is not payable until my sixty sixth birthday. I recently received a pension forecast from the pension office which advised me that I was seven years short in my NI contributions to qualify for the full state pension of £155 per week. If that remains the same until my retirement then I will only be entitled to £105 per week. I have no other pension arrangements in place and even if I did I would still want to bring my national contributions up to qualify for the full state pension. This post is primarily about finding the most cost effective way for me to qualify for the full state pension. Next I need to tell you about my personal circumstances.
I am a single person and have two sources of income, both very small. One is from a paid for rental property, the net income is only a fraction of my personal allowance for income tax. The second is from swing trading stocks in my S&S ISA and day trading in a spreadbetting account. The agreggated amounts of the two come in well below the £11,000 single persons allowance for income tax. I am on self assessment for the rental income. For those wondering how I survive on such a low amount it is because I live with my partner, a lady friend of many years who is the main breadwinner in our household. She is supportive of my quest to eventually, by compounding gains, to earn a full time living from trading.
So I need to remedy the shortfall in my NI contributions. As I see it I have three options:
1) Find employment for the next seven years!
2) Pay voluntary NI Contributions which the pension office have indicated will cost me approximately £4900 (7 x £700 p.a)
3) Find self employment for the next seven years and pay national insurance this way
My preferred and most cost effective way for me is 3) providing what I have in mind will qualify me to pay NI contributions. This is where your help comes in. Please allow me to explain.
I understand that a sole proprietor of a business is allowed to earn a net profit up to £5965 p.a. before the profit becomes assessable for NI contributions. However, if the net profit is below that then he/she can opt to pay voluntary NI contributions, about £145 p.a. at current rates. So if this were typical of my business then I could accomodate for the shortfall in my NI contributions over the next seven years saving £555 p.a (£700pa -£145pa) or £3885 in total. Obviously this is just roughly as there are some variables which I have not taken into account but still a substantial saving is involved.
So, as many may have guessed by now I am wondering if I can set up as a sole proprietor in the business of trading stocks to qualify for paying NI contributions. Trading would be either in an ordinary share dealing account or as I am just coming around too, in a more cost effective CFD account. My net profit will come in under £5695, the threshold for being assessed for NI contributions and below the personal allowance for income tax. I am trying to compound gains to build my capital but profit could be kept below the threshold by continuing to trade in the S&S ISA should the threshold be reached in any one year.
If you did get this far, thank you for reading and thank you very much in advance if you can help.
First post here, its going to be a little long winded but necessary for anyone willing to help. Here goes.
I'm fifty nine years old therefore my state pension is not payable until my sixty sixth birthday. I recently received a pension forecast from the pension office which advised me that I was seven years short in my NI contributions to qualify for the full state pension of £155 per week. If that remains the same until my retirement then I will only be entitled to £105 per week. I have no other pension arrangements in place and even if I did I would still want to bring my national contributions up to qualify for the full state pension. This post is primarily about finding the most cost effective way for me to qualify for the full state pension. Next I need to tell you about my personal circumstances.
I am a single person and have two sources of income, both very small. One is from a paid for rental property, the net income is only a fraction of my personal allowance for income tax. The second is from swing trading stocks in my S&S ISA and day trading in a spreadbetting account. The agreggated amounts of the two come in well below the £11,000 single persons allowance for income tax. I am on self assessment for the rental income. For those wondering how I survive on such a low amount it is because I live with my partner, a lady friend of many years who is the main breadwinner in our household. She is supportive of my quest to eventually, by compounding gains, to earn a full time living from trading.
So I need to remedy the shortfall in my NI contributions. As I see it I have three options:
1) Find employment for the next seven years!
2) Pay voluntary NI Contributions which the pension office have indicated will cost me approximately £4900 (7 x £700 p.a)
3) Find self employment for the next seven years and pay national insurance this way
My preferred and most cost effective way for me is 3) providing what I have in mind will qualify me to pay NI contributions. This is where your help comes in. Please allow me to explain.
I understand that a sole proprietor of a business is allowed to earn a net profit up to £5965 p.a. before the profit becomes assessable for NI contributions. However, if the net profit is below that then he/she can opt to pay voluntary NI contributions, about £145 p.a. at current rates. So if this were typical of my business then I could accomodate for the shortfall in my NI contributions over the next seven years saving £555 p.a (£700pa -£145pa) or £3885 in total. Obviously this is just roughly as there are some variables which I have not taken into account but still a substantial saving is involved.
So, as many may have guessed by now I am wondering if I can set up as a sole proprietor in the business of trading stocks to qualify for paying NI contributions. Trading would be either in an ordinary share dealing account or as I am just coming around too, in a more cost effective CFD account. My net profit will come in under £5695, the threshold for being assessed for NI contributions and below the personal allowance for income tax. I am trying to compound gains to build my capital but profit could be kept below the threshold by continuing to trade in the S&S ISA should the threshold be reached in any one year.
If you did get this far, thank you for reading and thank you very much in advance if you can help.