Brits have until April 2025 to plug any gaps in their National Insurance record which will give them the full state pension when they reach the official retirement age
Many Brits will be relying on the state pension when they retire so they need to make sure they will get the full amount.
Over the last 18 months, warnings have been issued as a major deadline has been approaching. Last year, the Government had a deadline for how far back National Insurance could be bought to plug any gaps in a person’s record. This record dictates how much state pension someone can receive.
The full new state pension – which is claimed by anyone who reached state pension age before April 6, 2016 – is currently worth £221.20 a week. If you do not have 35 years of National Insurance Contributions (NICs) then you will get less. Some people need more than 35 years.
The original deadline was April 5, 2023, but this was extended once until July 2023, and then until April 2025 after a public awareness campaign, spearheaded by MoneySavingExpert.com founder Martin Lewis, caused phone lines to the Future Pension Centre to become jammed. Right now, you can currently buy back missing National Insurance years dating back to 2006 but after the deadline, you will only be able to go back six tax years.
With only one year left to go before the deadline, Brits should start checking to see if there are any gaps in their record – if you do then you have one of two options. You can either make voluntary National Insurance payments or claim National Insurance Credits for your missing years. Here we explain the difference between the two and which option could apply to you.
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When you should make voluntary National Insurance payments
If you do not pay National Insurance you may have gaps in your record. This could be because you were: employed but had low earnings, were unemployed and not claiming benefits, living and paying tax abroad, or were in prison.
If you have savings and are approaching retirement age this may be a good option as you can spend a few thousand plugging the gaps and it could boost your state pension payments by tens of thousands.
Before making any payments, you’ll first need to check if you have any gaps. You can check this by using the online “Check your State Pension” forecasting tool on Gov.uk, by calling the Future Pensions hotline, or by post by completing a BR19 form. Your forecast will tell you exactly how much money you will be paid each week/month/year in retirement. Your forecast will also include any shortfalls.
If you have shortfalls, you can then make voluntary National Insurance payments to top them up. Before doing so, you should check if you can plug them for free – we explain when you can below.
If you are making a one-off payment and have decided how many years to top up and which ones exactly, you will need to contact HMRC to find out the cost. Each full year of National Insurance costs around £800 – however, people pay different rates depending on their situation. You can find out more about the different classes of National Insurance on GOV.UK here.
To make a payment, you will need to get an 18-digit reference number from HMRC. You can get this from HMRC either over the phone by calling its National Insurance helpline on 0300 200 3500 or through the post. Once you have the 18-digit number, paying for the missed years can be done by online bank transfer, from a bank at your bank or building society or by cheque to HMRC.
When you should claim National Insurance Credits
Before you make any voluntary National Insurance payments, you should first check if you can plug the gaps in your record for free. You can do this by claiming National Insurance credits, these plug in the gaps for the times when you were not working or not earning enough to pay National Insurance.
According to the Government’s website, you may be entitled to National Insurance credits if you were claiming statutory sick pay and not earning enough for a qualifying year. Those who claim benefits such as Universal Credit, Jobseeker’s Allowance (JSA) and Employment and Support Allowance (JSA) will qualify for National Insurance credits.
If you took time off work to care for a new child then you can get free National Insurance credits for this period if you were claiming certain Government payments. These include:
- Maternity Allowance
- Statutory Maternity Pay
- Statutory Paternity Pay
- Statutory Adoption Pay
Parents who claim Child Benefit can claim National Insurance Credits if they are not working or earning less than £123 a week. Relatives such as grandparents, aunts, uncles or cousins, who do not claim Child Benefit, but do look after children under the age of 12, can also claim credits to plug the gaps. Foster carers – or kinship carers in Scotland – have also been able to claim credits since 6 April 2010.
If you are aged over 18 and in full-time training, you can also get National Insurance credits. This is provided the training is approved and does not last longer than a year and Government sponsored courses are approved automatically. However, this does not apply to university courses.
If you’re unable to work due to illness or disability, you can automatically receive National Insurance credits if you are claiming Employment and Support Allowance (ESA) or Unemployability Supplement or Allowance. If you are not receiving these benefits, but do meet the criteria for them, you can claim the credit through your local Jobcentre. You can also claim if you are receiving Statutory Sick Pay but not earning enough to make a qualifying year for National Insurance.
Since the state pension rules changed, requiring 35 years’ contributions to receive the full amount, the Government introduced the “Military spouses National Insurance credits system”. This allows military spouses to claim credits whilst they were abroad with their spouse or civil partner on armed forces duty. However, you can only claim for the periods you were overseas, on or after 6 April 1975.
Those who are not self-employed but have attended jury duty can claim and those who have a “quashed” prison sentence can too. If a conviction or sentence is quashed, it is ruled that it is no longer valid. So if you served two years in prison later to have it quashed – you can claim National Insurance Credits for those two years.
A lot of National Insurance Credits are added to your record automatically, however some are not. So you should always check before putting in any claims. Claims for some credits can be backdated for many years, so it’s always worth checking to see if you qualify.
Contact the free Future Pension Centre on 0800 731 0175 before buying any National Insurance contributions to check if you’d benefit from plugging any gaps in your record. If you’re already at state pension age, you should contact the free Pension Service helpline on 0800 731 0469.
