In certain circumstances it can be beneficial to make voluntary National Insurance Contributions (NICs) to increase your entitlement to benefits, including the State or New State Pension.
Usually, HMRC allows you to pay voluntary contributions for the past 6 tax years. The deadline is 5 April each year. However, there is currently an opportunity for people to make up for gaps in their NICs for the tax years from April 2006 to April 2017 as part of transitional measures to the new State Pension.
This deadline was set to expire on 5 April 2023 but had been extended until 31 July 2023. The deadline has now been further extended until 5 April 2025 to help allay continued concerns that the existing deadline would not have allowed many taxpayers to fill gaps in their NIC records. HMRC’s helplines have been struggling to meet the demands for information and processing claims to pay additional NIC contributions.
HMRC has also confirmed that all relevant voluntary NIC payments will be accepted at the rates applicable in 2022-23 until 5 April 2025.
You might want to consider making voluntary NICs if:
- You are close to State Pension age and do not have enough qualifying years to get the full State Pension.
- You know you will not be able to get the qualifying years you need to get the full State Pension during the remainder of your working life.
- You are self-employed and do not have to pay Class 2 National Insurance contributions because they have low profits.
- You live outside the UK but want to qualify for benefits.
If you fall within any of these categories, it may be beneficial to get a State Pension forecast and examine whether you should consider making voluntary NICs to make up missing years, known as topping up. Not everyone will benefit from making voluntary NICs and a lot depends on how close you are to retirement age and your NIC payments to date. If you think this opportunity may be relevant to your circumstances, please be in touch.
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