Paul Sanchez
Voluntary National Insurance contributions are a way to fill gaps in your National Insurance record and increase your State Pension. Gaps can occur for many reasons, such as not working, being unemployed, or living abroad. By paying voluntary contributions, individuals can ensure they meet the minimum requirement of 10 'qualifying years' to receive a State Pension. The value of these contributions can be significant, potentially increasing one's pension by thousands of pounds. However, whether it is worth it depends on individual circumstances, as there may be other ways to fill gaps, and not all contributions will increase one's pension.
| Characteristics | Values |
|---|---|
| Purpose | Filling gaps in NI record |
| Gaps in NI record caused by | Years without NI contributions or credits, moving abroad, unemployment, etc. |
| Who should consider paying? | Self-employed people with annual profits of less than £6,725-£6,845, people living outside the UK, examiners, moderators, invigilators, etc. |
| Benefits | Increase in State Pension, ability to qualify for certain benefits |
| Cost | £3.50/week for Class 2 NI, £180/year; £6.60/week added to State Pension; £275.08/year added to State Pension for those aged 66+ |
| Deadlines | Deadlines vary depending on the tax year being paid for, with some deadlines set for 5 April 2025 and 5 April 2026 |
| Other considerations | Check for credits before paying, as they can fill gaps for free; check eligibility and NI record before paying; seek financial advice |
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What You'll Learn
Filling gaps in your NI record
Gaps in your NI record can occur for a variety of reasons, such as moving abroad or being unemployed and not claiming benefits. These gaps can be filled by paying voluntary NI contributions, usually ''Class 3' contributions. However, it's important to check your NI record first to identify any gap years and understand the cost of filling them.
Voluntary contributions can be made to boost your State Pension. For example, buying a full National Insurance year based on 2022/23 rates could increase your State Pension by £275.08 annually. Over 20 years, this could add up to around £5,500. If you're self-employed, you may need to pay 'Class 2' or 'Class 4' contributions, depending on your profits. 'Class 2' contributions are currently £3.50 per week, while 'Class 3' contributions add about £340 per year to your State Pension.
It's important to note that you may be able to fill gaps in your NI record for free with NI credits. Check your eligibility for these before deciding to pay voluntary contributions. Additionally, if you're already receiving the State Pension, you can still fill gaps, but it may not increase your pension amount.
To fill gaps in your NI record, you typically need to pay voluntary contributions for the previous six years. However, there are exceptions to this rule. For example, if you reached or will reach State Pension age after April 6, 2016, you can fill gaps in your NI record going back to 2006, but this opportunity ends on April 5, 2025.
Before making voluntary contributions, consider seeking financial advice to understand if it aligns with your circumstances and pension goals.
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How it affects your State Pension
Gaps in your National Insurance record can mean that you will not have enough years of National Insurance contributions to get a State Pension. You usually need at least 10 "qualifying years" to get a State Pension, and a qualifying year is a tax year in which you were working and paying NI contributions, or paying voluntary NI contributions.
Voluntary contributions can be made to fill in gaps in your NI record and increase the amount of State Pension you will receive. For example, if you are self-employed and your profits are less than £6,725 a year, you can voluntarily pay Class 2 contributions. If your profits are more than £12,570 a year, you must pay Class 4 contributions. Class 2 NI goes towards your State Pension. If your annual profit is between £6,725 and £12,570, you automatically build up entitlement to benefits (including State Pension). If you earn less than £6,725, you may want to consider paying voluntary contributions to top up.
Based on the 2022/23 rates, buying a full National Insurance year could boost your State Pension by £275.08 a year. So, if you start claiming at 66 and live for another 20 years, you’ll have topped up your State Pension by around £5,500. This could make a massive difference to your future.
However, it's important to note that voluntary contributions do not always increase your State Pension. For example, if you were contracted out, or if you had enough qualifying years to get a full State Pension anyway, then voluntary contributions may not make a difference. It's also worth seeing if you can fill any gaps for free with NI credits.
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Who is eligible to pay voluntary contributions
Paying voluntary National Insurance contributions can be a good way to fill gaps in your NI record, which can increase the amount of State Pension you receive. However, it may not always be the best option for everyone, and there are certain criteria that must be met to be eligible to pay voluntary contributions.
Firstly, you must have a gap in your NI record to be eligible to pay voluntary contributions. Gaps can occur for many reasons, such as moving abroad, being unemployed, or not claiming benefits. You can check your NI record online to see if you have any gaps. If you do have gaps, you can usually only fill them for the past six years, and the deadline to do so is 5 April each year. For example, you have until 5 April 2026 to make up gaps for the tax year 2019-2020.
There are several reasons why you might want to pay voluntary contributions. These include:
- Being close to State Pension age but not having enough qualifying years to get or increase your State Pension.
- Knowing you will not be able to get the qualifying years needed to get the full State Pension during your working life.
- Being self-employed with annual profits of less than £6,845 (or between £6,725 and £12,570, in which case you may want to pay to top up).
- Living outside the UK but wanting to qualify for certain benefits or the State Pension.
- Not being eligible for National Insurance credits.
It is important to carefully consider your circumstances before deciding to pay voluntary contributions. You should check your State Pension forecast to see if you are predicted to get the full amount. If you are not already receiving the State Pension, you can also fill gaps for free with NI credits, so it is worth seeing if this is an option for you. Additionally, if you have claimed or are claiming Universal Credit, you should wait until any missing credits are showing on your record before making any voluntary payments.
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Self-employed and voluntary contributions
If you are self-employed, you may have to pay two types of National Insurance (NI): class 2 and class 4. Class 2 NI goes towards your State Pension. If your annual profit is between £6,725 and £12,570, you automatically build up entitlement to benefits (including State Pension). If you earn less than £6,725, you don't, so you may want to consider paying voluntary contributions to top up.
Voluntary contributions are charged at the higher class 3 rate. For a full qualifying year of NI contributions, you need to earn at least £6,396 a year from a single employer – only weeks where you've earned at least £125 (the 'lower earnings limit') count towards this total. If you are a married woman or widow and you are entitled to pay reduced-rate contributions, you do not need to pay class 2 NIC.
If you are self-employed and have annual profits of less than £6,845, you may want to pay voluntary contributions. If you are a landlord who is eligible to pay Class 2 National Insurance, or a minister of religion who does not receive a salary or stipend, you may also want to pay voluntary contributions.
You can check your State Pension forecast to find out if you’ll benefit from paying voluntary contributions. If you’re below State Pension age, you can check your State Pension forecast or contact the Future Pension Centre to find out if you’ll benefit from paying voluntary contributions. If you’re above State Pension age, or will reach State Pension age in the next 6 months, contact the International Pension Centre. They will check if you have a gap in National Insurance contributions and tell you how much you need to pay.
Based on the 2022/23 rates, buying a full National Insurance year could boost your State Pension by £275.08 a year. So if you start claiming at 66 and live for another 20 years, you’ll have topped up your State Pension by around £5,500. However, it will take roughly three years to make up for what you’ve spent after you start claiming.
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Refunds on voluntary contributions
You can claim a refund on your National Insurance contributions from HM Revenue and Customs (HMRC). The process depends on the class of National Insurance for which you are claiming a refund.
If you have claimed Universal Credit, you need to check your National Insurance record on Gov.uk and see if you're missing any credits. If you are, the DWP says that once the issue is resolved, claimants' records will be corrected. HMRC advises claimants to wait until Universal Credit credits are showing on their record before making any voluntary payments needed to make that a qualifying year. If you made voluntary contributions for tax years you later find out you didn't need to increase your state pension, you can request a refund. Whether you'll get one is determined on a case-by-case basis, and there are no hard and fast rules on whether you'll be successful. However, it's worth applying if you think you may have paid unnecessarily, especially due to an error outside of your control.
Voluntary National Insurance contributions are normally 'class 3' contributions, but some people pay ''class 2' contributions, including some self-employed people. You can check which class applies to you on the government website.
You can fill gaps in your NI record by paying voluntary contributions. Checking for and filling gaps in your NI record could be worthwhile. Under normal rules, you can only fill gaps in your NI record from the last six years. But if you reached or will reach State Pension age after 6 April 2016, you can currently fill gaps in your NI record going back to 2006. However, you will lose this opportunity after 5 April 2025. After that, normal rules will apply.
Whether you’ll get the State Pension and how much you’ll get depends on the number of ‘qualifying years’ on your NI record. A qualifying year is a tax year in which at least one of the following scenarios applied to you: you were working and paying NI contributions, you were receiving NI credits, or you were paying voluntary NI contributions. To get any State Pension, you usually need ten qualifying years.
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Frequently asked questions
Voluntary National Insurance contributions are payments made to fill gaps in your National Insurance record, which can occur when you don't pay National Insurance or don't receive credits. These gaps can impact your eligibility for benefits and the State Pension.
Those who are self-employed with annual profits of less than £6,725 to £6,845 may want to consider voluntary contributions, as they can build up entitlement to benefits and the State Pension. Additionally, if you're close to State Pension age and don't have enough qualifying years, voluntary contributions can help increase your pension.
The cost of voluntary contributions depends on the type of class and the number of gap weeks or years you need to fill. Class 2 NI, for example, is currently £3.50 a week, while Class 3 contributions can add about £340 a year to your State Pension.
Voluntary National Insurance contributions can be worth it if you need to fill gaps in your record and boost your State Pension. However, it depends on individual circumstances. It's recommended to check your National Insurance record and seek financial advice before making a decision.
