Taxpayers are advised to check their national insurance (NI) record before 5 April 2023 as the government is reducing the window for topping up contributions.
Usually, it is only possible to make voluntary contributions for the past six tax years. Currently there is an extension in place allowing individuals to plug gaps in their NI history from 6 April 2006 to the present day.
From 6 April 2023, the timeframe for making voluntary contributions will return to the standard six years.
NI contributions or credits (eg while unemployed or claiming certain benefits) affect entitlement to and level of state pension as well as other benefits, such as employment and support allowance.
Generally, to qualify for the maximum ‘new state pension’ (received by those retiring on or after 6 April 2016) a person must have 35 qualifying years of NI contributions. For part payment of the ‘new state pension’ a person must have contributed for at least 10 years.
For those whose NI record started before 6 April 2016, different rules may apply; the number of required years of NI contributions or credits to obtain the full state pension may be higher.
Actions for taxpayers to take before 5 April 2023:
- check your NI record
- identify any differences between NI contributions paid and those showing on HMRC’s system;
- identify any NI credits that are missing from periods in which they should have been received;
- Identify any shortfalls in contributions;
- contact HMRC if you think there are any errors; and
- decide whether to make voluntary NI contributions.
As always, please speak with your usual contact at Peplows if you need assistance.