Topping up NICs: when should you make additional National Insurance contributions NICs? How do you check your NICs record? How to pay voluntary NICs? How to check your state pension entitlement?
A freeview guide
At a glance
- Taxpayers who have gaps in their National Insurance Contributions (NICs) records may 'top up' their NICs by making extra contributions.
- A gap in your NICs can result in you receiving a lower State Pension than if you have a full record.
- Taxpayers can check with the Future Pension Centre to confirm their NICs record and expected State Pension.
- Topping up NICs is done by paying extra Class 2 or Class 3 contributions.
- Under normal rules taxpayers may only go back six years to correct their NICs record.
- Under a special concession, the government is allowing taxpayers to go back to 2006/07, but this facility ends on 5 April 2025.
Overview
Qualifying contributions
Anyone retiring on or after 6 April 2016, under the ‘new State Pension’ rules, requires about 35 qualifying years to claim the full state pension.
- To claim any State Pension, you usually need at least 10 qualifying years on your NICs record.
- Some people may have gaps in their record if they have not received NI credits or have not paid any, or sufficient, NI in some years, such as through employment or self-employment.
- Qualifying years may differ where your NI record started before 6 April 2016.
- The government extended the voluntary NIC deadline to 5 April 2025. This gives taxpayers more time to fill gaps in their records to maximise their future State Pension benefits.
Voluntary NICs
Where there are gaps in your NI record, voluntary NICs can be paid to obtain a higher State Pension entitlement or entitlement to other state benefits. Typically, this might affect you if you are aged between 45 and 60 years and so close to the State Pension age and do not have enough qualifying years and know you will not be able to get the qualifying years needed during your remaining working life.
How far back can voluntary NICs be paid?
Voluntary contributions can usually only be paid for the past six years: this means that gaps for the tax year 2016-17 must have originally been made up by 5 April 2023. Taxpayers originally had until 31 July 2023 to correct this, but this has now been extended until 5 April 2025.
Transitional arrangements currently mean that voluntary NI contributions can be made as far back as 2006, rather than the usual six years. This exception is for:
- Men born after 5 April 1951.
- Women born after 5 April 1953.
Such individuals now have until 5 April 2025 to pay voluntary contributions for gaps in NI records between April 2006 and April 2016. After the deadline, this opportunity will be lost as the transitional arrangements will have ended.
The original contributions under the first extension used the 2022-23 NICs rates. Under the new extension, the 2023-24 rates will apply to these payments up until the 5 April 2025 deadline.
Action to take
You should:
- Go online to check your National Insurance contributions record. You can do this via a Government Gateway account. You will need to set one up if you have not already obtained one.
- Review your contribution history for gaps, and obtain a State Pension forecast.
- Contact HMRC if any errors are identified.
- Confirm if they are eligible to pay voluntary contributions in respect of any gaps.
- Establish how much voluntary contributions will cost and consider making up any shortfall by 5 April 2025, particularly for the period April 2006 to April 2017, before this opportunity is lost.
NI records and State Pension forecasts can be viewed online, via an individual’s Personal Tax Account. Alternatively, records can be requested from HMRC by phone or post.
Voluntary contributions: How much to contribute?
It's been pointed out by Martin Lewis that it's not always worth making full voluntary contributions, you need to work out what level of voluntary contribution will provide the most benefit. He has provided a calculator on his Money Saving Expert website.
Useful guides on this topic
State Pension Age
The state pension age is gradually being increased. What is the current state pension age? How often is it reviewed?
Personal Tax Account
What is a Personal Tax Account? How do I get one? What can I do with it?
National Insurance: Rates
What are the current National Insurance rates? What rates will apply to next year?
National Insurance: What's the maximum payable?
How are National Insurance Contributions (NICs) limited? What is the maximum payable? What different rules apply to employment and self-employment income?
External links
Policy paper: Extending the voluntary National Insurance Contributions deadline
GOV.UK: Voluntary National Insurance
This is Money: State pension top-ups gridlock: Savers claim DWP phones are overwhelmed in rush to fill old gaps before April deadline
