The important April deadline for National Insurance credits: what you need to know

The UK State Pension is currently payable from age 66, although this is set to gradually rise to age 67 in 2028. In the tax year 2023/24 it pays up to £203.85 a week.

However, the amount that you receive for your State Pension is dependent on the National Insurance contributions (NICs) you’ve made or been credited with throughout your working life.

To receive the full State Pension, you’ll need to have 35 years’ worth of NICs on your record. If you have fewer than 10 years, then you won’t be eligible for any State Pension. Transitional rules apply to those with an NI record preceding 6 April 2016.

It is possible to plug gaps in your National Insurance (NI) record with voluntary payments, but ordinarily you can only do this for gaps that go back six years. Until 5 April 2023, however, you can add credits to your record from as far back as 2006 if eligible.

So how do you know if you have any years missing from your NI record? And if you do, is it worth paying the voluntary contribution to add them? Read on to learn more about the scheme and how to decide if it’s right for you.

Obtain a State Pension forecast to discover if you have any gaps in your NI record

You will normally add NICs to your record by doing any of the following:

  • Paying NICs from your salary
  • Receiving NI credits if you are registered as unemployed, ill, or if you became a parent or carer
  • Paying voluntary NICs.

If there are any years during your working-age life when you weren’t working and didn’t receive benefits or you worked overseas, then it’s possible that you may have a gap in your NI record.

To check how many years of NICs you have on your record, you can use this tool on the government website and obtain a State Pension forecast.

Check whether buying credits is right for your circumstances

Depending on the reason for the gap in your record, you might be able to backdate a claim for a benefit that would automatically add NI credits for you.

For example, registering for Child Benefit, even if you don’t want to receive the payment for tax reasons, entitles you to NI credits.

Additionally, if you are a grandparent and have been looking after your grandchildren, you can apply for “specified adult childcare credit” for free, which would grant you NI credits for that time.

There are some circumstances in which buying additional credits isn’t quite as beneficial.

For example, if you have a short life expectancy, you may not live long enough to reap the rewards of buying the additional credits.

Filling the gaps in your record could be beneficial

While “buying” additional years in your NI record might not be suitable for everyone, it does have some significant benefits that are worth considering.

It could enable you to receive a full State Pension

Depending on how many gaps you have in your record, filling some or all of them could mean that you secure the full State Pension for your later life.

Since the State Pension rises in line with the cost of living, this could be a valuable income for you after you finish working.

The rate of return could be high

For many people, the rate of return they receive on voluntarily filling the gaps in their NI record could be higher than other investments or retirement savings.

MoneyWeek demonstrates this with the example of someone with 10 missing years. At the current rates, they could pay out roughly £8,000 to fill these gaps and see a boost of £55,000 in State Pension payouts over a typical 20-year retirement.

Get in touch

If you’d like to find out how you can ensure you have enough income to fund the retirement you’re dreaming of, we can help. Email or call 01204 300010 to speak to us today.

Please note

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.


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