Gaps in NI contributions
PensionsSee how gaps in your National Insurance record can affect your State Pension and what you can do to fill them before retirement.
Transcript
Lots of people have gaps in their National Insurance contribution record. This can be fixed. This could be because you were unemployed and not claiming benefits, had low earnings that didn’t trigger contributions, worked outside the UK, or had periods of education or caring for others that didn’t qualify for credits. But there are ways to fix this and get a higher State Pension.
First, you should log into your personal tax account on the website gov.uk to see which years are full and which have gaps. You’ll also be shown how much those missing years reduce your State Pension forecast. Depending on how long you plan to work, you may not need to plug gaps to reach the required 35 years for full State Pension. That’s because if you’re still working, then you’ll continue to build up contribution years. In fact, if you have worked for a very long time, you could already have a 35 year record despite having some gaps or you could be on track to get 35 years before stopping work. In this case, topping up National Insurance contributions to fill gaps won’t help increase your State Pension.
If you are closer to retirement age and have lots of gaps and no chance of making them up between now and State Pension age, then you can consider paying what is called voluntary Class 3 contributions. Normally, you can plug the gaps as far back as up to six tax years. The deadline to pay is April 5th each year. It could be worth doing this, as the amount paid in National Insurance contributions adds enough to the State Pension to pay for itself within a few years of retirement.
Before you pay voluntary contributions, check if you’re eligible for National Insurance credits. These are usually given if you’re a non-earner, but have other responsibilities, such as caring for a child or grandchild, or on maternity or paternity leave. You may also be eligible for credits if you’re looking for a job, disabled or on sick leave. It’s quite common to have periods of time when you haven’t paid National Insurance contributions.
If you check on the gov.uk website, you can see what the gaps are and if you need to top up. Taking time to check this may mean that you don’t miss out on money in retirement.
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