Question:
I have a private limited company which consists of two directors (my wife and I) and two shareholders (my wife and I - equal shareholders). I work ‘full time’ for the company and am paid a monthly wage which is the minimum amount necessary to ‘protect’ my entitlement to state pension. I am 49 years old. The company pays dividends to my wife and I. If the company were to increase my monthly salary, what would be the impact on my ‘final’ state pension?
Arthur Weller replies:
The present state pension rules say that in order to get a full basic state pension an individual must have paid or been credited with Class 1, 2 or 3 NIC's, on an amount equal to 52 times the lower earnings limit in a number of 'qualifying years' in working life between age 16 and pensionable age. Men born after 5 April 1945 only need 30 qualifying years. From your question, it seems that you are at present paid enough to be credited with these contributions.
