National Insurance and State Pension Credits

Lower Earnings Limit (LEL) - For 2010-11 the amount you can earn without involving National Insurance is £97 per week. However, at this rate you will not qualify for credits towards your State Pension.

Primary and Secondary threshold - For 2010-11 you will not pay Class 1 contributions until your earnings exceed £110 per week. However, earnings over £97 and up to £110 per week will qualify as credits towards your State Pension.

Consequently, you can clock up contributions towards your State Pension without actually paying National Insurance!

Note: Coincidently £97.65 a week is the current, basic State Pension.

When you do actually pay Class 1 contributions you will accumulate credits towards a basic State Pension and the additional State Pension.

The above comments apply to employed persons. If you are self-employed and pay Class 2 and possibly Class 4 contributions you will accumulate credits towards the basic State Pension but not the additional State Pension.