Dropping a clanger

KEY POINTS

• National Insurance contributions and the ‘qualifying year’.
• Calculating the state second pension.
• Taking S2P into account in incorporation calculations.
• Formulae and worked examples.
• S2P entitlement continues after 30 years.

This article looks at the impact of the state second pension and its potential effect on the decision to incorporate together with any impact on remuneration planning itself for the incorporated owner/manager.

It suggests that not dissimilarly to it transpiring that our beloved knitted pink whistling Clangers belied expletives and political statements our profession seems to have missed an extra underlying benefit of incorporation. Both were under our noses all that time.

State second pension (S2P) and the basic National Insurance retirement pension (NIRP) are based on NI contributions but the entitlement to their benefits is calculated...