Voluntary Redundancy & National Insurance

[TheGoodGuy]

Hi guys.....

I need a bit of advice if possible please......

The company I work for is having one of it's ever increasing head-count reductions & is offering people two & a half years money to go.

Now I understand the income tax rules ie, taking a tax free lump sum plus then taking the remainder over the next 2 tax years to ensure paying the lower rate tax (20%) on it, as opposed to taking the remainder as 1 lump & having to pay 40% on a proportion of it.
This way I could make the money last 3 years living as I do now.....or at a push 4 by dipping into my own reserves.
Either way at some stage I would need to find another job

What I need to know is......
If I take voluntary redundancy, with no intention of looking for work for 12 months or so, ie just having time out.......what are the rules regarding National Insurance contributions.......is it paid for you, do you just not pay it, or is there some other mechanism that comes into play?

(All the 'worked examples' we have been shown at work cover all tax liabilities but fail to mention NI contributions at all.)

By the way, the company haven't said I can go yet.

Ada.

[Win2Win]

I don't think skipping a year of NI contributions would be a problem, but you can pay them yourself directly if you wish.

Are you having a Gap year with the Prince in Africa? :)

[GlosRFC]

Sign on...and your NI contributions should be covered.

[Win2Win]

You'll be lucky to get anything out of them if you've been paying your taxes....:rolleyes:

[TheOldhamWhisper]

http://www.adviceguide.org.uk/index/life/benefits/national_insurance_contributions_and_benefits.htm

I agree with Glos - Sign on and 'look for work' (although they won't be pushing too hard for you to find a job at first :wink )

The other option is to go back to studying full time - being unemployed, you might be able to find a nice free home study course from the OU or similar. You don't necessarily have to complete the study if you don't want to but it's easy enough to stretch it out for the full year and then give it up.

[sukie]

Ada

Keith is right about skipping a year or two (which is what i did when i was made redundent). When you do go back to work the IR will send you a letter through explaining your choices about paying contributions you havent paid. Read that carefully as you will find that you dont have to pay the payments you will have missed, providing you have made something like 25 years worth of contributions by the time you retire.

[johnwilly]

Glos has it right - I've been there, signed on and claimed unemployment benefit.