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Class 3A NICs

Only available between 12th October 2015 and 4th April 2017

It buys a different type of state pension compared to Class 3 NICs:

  • Class 3 NICs increase the number of qualifying years for the new state pension or BSP
  • Class 3A NICs purchase a higher level of additional state pension, ie SERPS or S2P

Question - Use Your Note Taker To Jot Down Ideas / Calculations

The income purchased with Class 3A NICs can best be described as:

a. Payable tax free and protected by the triple-lock guarantee.

b. Payable tax free and uprated each year in line with CPI.

c. Taxable as pension income and protected by the triple lock guarantee.

d. Taxable as pension income and uprated each year in line with the CPI.

D)

The income provided by Class 3A NICs is taxed as pension income and increased in line with the CPI.