You Need 35 Years Of National Insurance To Get The Full Amount
There are four classes of national insurance contributions:
Class 1 contributions are paid by employers and their employees.
Class 2 and 4 contributions are paid by self-employed people.
Class 3 contributions are voluntary contributions paid by people wanting to fill gaps in their contributions record.
For anyone reaching state pension age after 06/04/2016 you need at least ten years’ national insurance contributions or credits to qualify for any state pension. You need at least 35 years to receive the full state pension amount.
The tax year in which you reach state pension age can’t be used as a qualifying year for your state pension.
You don’t need to make national insurance contributions once you reach state pension age but you might still be able to make voluntary contributions to top up any gaps in your record.
If you pay voluntary national insurance contributions, it can take a few weeks for your National Insurance record to update.
How To Check Your Current State Pension Forecast
If you’re under state pension age, check your state pension forecast to see if it’s worth making voluntary NICs.
This shows an estimate of what you’re due to get at state pension age, based on your current contribution record and the maximum number of contributions or credits you could continue to make or get.
You can ask for a state pension forecast in three ways:
· Online: Check your state pension forecast (you’ll need to create an account to prove your identity).
· By phone: 0800 731 0175 or +44 191 218 3600 if calling from abroad.
· By post: by completing a BR19 form and sending it to ‘The Pension Service 9, Mail Handling Site A, Wolverhampton, WV98 1LU’.
You can use the phone or post options if you’re under state pension age by at least 30 days.
Before You Make Voluntary Contributions
national insurance contributions don’t always increase your state pension and there’s no automatic right to a refund. So always make sure you’ll benefit from making them first.
need at least 35 qualifying years of national insurance contributions or credits to receive the full state pension or 30 years if you reached state pension age before 6 April 2016. So, a gap doesn’t necessarily mean you won’t get the full state pension amount.
Here’s what to consider before you make voluntary NICs:
If you already claim pension credit, any increase in the state pension would normally reduce your pension credit award. This often means you might not be any better off paying voluntary NICs.
If you die before reaching state pension age, you won’t get any state pension.
If you're in very poor health or if you have a short life expectancy, you might not get the benefit of an increased state pension. This is because it normally takes several years to get more back than you’ll pay in voluntary national insurance contributions.
You might be able to use contributions from your spouse or civil partner instead of paying voluntary NICs. This includes if they’ve died or you’ve split up.
A higher state pension might mean you pay more tax.
If you’re not at state pension age yet, instead of making voluntary national insurance contributions, you might be able to top up your record by working or receiving national insurance contribution credits.
Cost Of Voluntary Contributions
The cost to fill in gaps in your National Insurance record for the 2024/25 tax year are:
Class 2: £3.45 per week (or £179.40 per year).
Class 3: £17.45 per week (or £907.40 per year).
Each additional qualifying year works out to be an extra £6.32 per week (or £328.64 per year) in state pension.
If you lived 20 years, the amount you would get back would be over £6,500 for an initial cost of between £179 and £907 which is pretty good value in anyone’s book!
Whether you pay Class 2 or 3 will depend on your employment status and if you ever lived and worked abroad.
If you’re paying national insurance contributions for previous tax years, the cost depends on the year involved. For example, the cost of Class 3 voluntary national insurance contributions for each of the following full years would be:
2006/07– 2019/20: £824.20
2020/21: £795.60
2021/22: £800.80
2022/23: £824.20
2023/24: £907.40
The government have a handy website which you might find useful.
How To Pay Voluntary National Insurance Contributions
If you decide to make a one-off payment of voluntary national insurance contributions or you want to pay quarterly when you get a bill, you’ll need to contact HMRC’s National Insurance office on 0300 200 3500 and ask for an 18-digit reference number.
The lines are very busy and you may not always be able to get through to an adviser. If you can't get through, you can also pay by cheque with your National Insurance number as a reference.
If you’re not making national insurance contributions and want to make voluntary contributions to ensure you don’t continually build up a gap in your National Insurance record, you can set up a Direct Debit to pay the money monthly.
For example, you might be employed but earning under £123 a week and not eligible for National Insurance credits. You don’t need to phone HMRC for a reference in this case.
How To Pay Class 2 Contributions
Until 5 April 2024, you made Class 2 national insurance contributions if you were self-employed, and most people made these contributions as part of their self-assessment tax bill.
However, if you don’t pay through self-assessment, you can use the ‘Pay now’ link on the government’s Pay voluntary Class 2 National Insurance page website. You’ll need:
Your banking details (account number and sort code), and
The 18-digit reference number on your HMRC payment request.
How to pay Class 3 contributions
To pay Class 3 national insurance contributions, use the ‘Pay now’ website.
You can usually only pay voluntary national insurance contributions to fill gaps for the past six years. Check the government’s page for payment deadlines for voluntary contributions.
However, until 5 April 2025, voluntary national insurance contributions can be paid to fill gaps for tax years back to April 2006.
The End!
I’m sorry that was a bit heavy! As you know, I tend to try and make things easy for the reader but this issue comes up a lot so I thought I’d add some more detail to things. I hope you’re still with me!
If you want or need to chat about this, do feel free to get in touch or visit my website.
I’ll try to go easier on you next time!...