If you earn an average of more than £6,032 per year (the lower earnings limit LEL for 2018/2019) you have the full benefit of Class 1 National Insurance (NI) without paying NI. Meaning you will have access to the following future benefits:-
- Basic State Pension*
- Additional State Pension
- New State Pension
- Contribution-based Jobseeker’s Allowance
- Contribution-based Employment and Support Allowance
- Maternity Allowance
- Bereavement Payment
- Bereavement Allowance
- Widowed Parent’s Allowance
- Bereavement Support Payment
*There is a further protection for parents who fall under the LEL who received Child Benefit for a child under 12. They get a NI credit against their pension record even if they earn below the LEL. Note it is only for the parent who receives the child benefit payments and this is usually the mother.
This is a great planning tip to ensure directors and company secreataries earn above the LEL to preserve future NI benefits.
