Pensions; Check Your National Insurance Record Before the end of July 2023

Industry experts are currently urging both employed and self-employed individuals to review their National Insurance records and consider whether they would benefit from making voluntary contributions before the end of July 2023.

Update 08/03/2023

This deadline has resulted in a surge of calls to HMRC, with many people not being able to get through. “HMRC and DWP have experienced a recent surge in customer contact. We’ve listened to concerned members of the public and have acted. We recognise how important state pensions are for retired individuals, which is why we are giving people more time to fill any gaps in their national insurance record to help bolster their entitlement.”, financial secretary to the Treasury, Victoria Atkins. The new deadline will be the end of July 2023.

The voluntary contribution scheme currently has an extension in place, permitting individuals to fill in any gaps in their National Insurance records all the way from 6 April 2006 to now. But after 31st July, the scheme will revert back to its 6-year restriction, meaning that for the 2023–2024 tax year, you’ll only be able to top up any contributions from the 2017–2018 tax year onwards.

How does my National Insurance record affect my pension?

The National Insurance contributions that you make go towards your state pension, and any gaps in those contributions can affect your entitlement. You need to have contributed to your National Insurance record for a certain number of years in order to qualify for either part or maximum state pension; this is usually 35+ years for maximum state pension or at least 10 years for a part pension, but this can vary depending on whether contributions began before 6 April 2016. You can find out more information about the new state pension and how it’s calculated via the government website.

Some individuals may be concerned that they won’t meet the necessary contributions in order to receive a state pension, and this is where the voluntary contributions scheme comes in. The scheme makes it possible for individuals to ‘fill in gaps’ in their National Insurance record. As we mentioned above, voluntary contributions can usually only be made for the last 6 tax years, but the current extension means that you can fill in any gaps from April 2006. 

What steps should you take to check your record?

We highly recommend that you take the time to review your National Insurance record before the 31st July deadline so that you don’t miss out on the opportunity to rectify any gaps. It’s easy to check your National Insurance record; you can do it online via the government website. The ICAEW has also created a really useful webinar, which talks you through the process in more detail. If you notice any errors in your record, it’s important that you contact HMRC as soon as possible. 

Is making a voluntary contribution right for me?

If, through your National Insurance record checks, you identify that there are some gaps in your contributions, you’ll need to consider whether making a voluntary contribution is the right thing to do for you. It’s worth noting that not everyone will benefit from making voluntary contributions, and so we highly recommend that you seek financial advice and contact the Future Pension Centre when considering this to ensure that you’re making the most informed decision and understand any long-term benefits and potential pitfalls. If you’d like further information about the scheme in general or you’d like specific advice relating to your individual circumstances, please don’t hesitate to get in touch with the Warr & Co team.