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National Insurance Contributions

Volume 493: debated on Monday 1 June 2009

To ask the Secretary of State for Work and Pensions if he will estimate the change in the number of people who would accrue contributory years of national insurance contributions as a result of charging employee national insurance contributions on aggregate income from all employments; and if he will make a statement. (269039)

Evidence from the Labour Force Survey 2006-08 shows that there are around 40,000 people who have two jobs each paying below the lower earnings limit but when aggregated their earnings are at least equal to the lower earnings limit. Around half of these people are estimated to already be accruing entitlement to contributory benefits through other interactions with the system and represent less than 0.1 per cent. of all people accruing entitlement to state pension in those years.

These are point-in-time data and people are unlikely to remain in this position for lengthy periods and may well have other opportunities to build up qualifying years during their working lives. Reforms in the Pensions Act 2007, including the reduction in the number of qualifying years to 30 for a basic state pension, mean that from 2010 people reaching state pension age will have far greater opportunity to build up a full basic state pension entitlement.

The aggregation of the earnings of people doing more than one job would add an increased burden for employers to comply with.