UPDATE: On 12th June 2023, the deadline to make voluntary contributions dating back to April 2006 was extended to 5th April 2025.

If you are planning to claim the UK state pension, we suggest you check your National Insurance (NI) record before 31 July 2023. An extension ending on 31 July 2023 allows taxpayers to fill in gaps in their NI contributions as far back as April 2006 and boost their state pension. From August 2023, you will only be able to go back six years.  

To receive a full ‘new state pension’ at retirement (if retiring after 6 April 2016), you usually need 35 qualifying years of NI contributions (although this can be higher if your NI record started before April 2016). To claim any state pension at all, you need at least 10 years of qualifying contributions.

NI contributions are typically made by employed and self-employed people based on earnings (although eligible individuals can also receive NI credits).

If an individual has not contributed enough before they retire, it may be advisable to top up their NI contributions voluntarily. It is usually only possible to make such contributions for the past six years, but transitional arrangements ending in July 2023 allow taxpayers to go back to April 2006. You may have a gap if, for example, you spent time working and paying tax abroad.

Voluntary contributions made before 31 July 2023 will also be at the lower (2022-23) rates rather than the rates which will apply for 2023-24 onwards.

Voluntary contributions may be especially beneficial for people close to the state pension age (currently between 66 and 68, depending on your date of birth) who will not be able to reach the number of qualifying years during the rest of their working life.

What action should you take? 

  1. Check your National Insurance record. 

You can do this on the government website. You will need a Government Gateway user ID and password. If you don’t yet have one, it is simple to create one. This will also give you your state pension forecast.

  1. Identify discrepancies.

Check if there are discrepancies between your NI contributions and those shown on HMRC’s system.

  1. Identify missing NI credits.

Identify any missing NI credits in periods when they should have been received, such as on receipt of child benefits or universal credit.

  1. Identify any shortfalls in contributions.
  1. Contact HMRC if you think there are any errors. 
  2. Decide whether to make voluntary NI contributions.

You should only do this after taking financial advice.

The above is general advice concerning National Insurance contributions and state pensions. If you have any queries about this topic, please contact Jill Springbett at jill.springbett@mgr.co.uk

Warning: The above is merely general guidance and should not be relied upon as formal advice. The advice we give to each client will depend on their specific circumstances. We suggest you take professional advice before taking any action in relation to the issues discussed above.