An individual needs 35 complete years of NIC (payments or credits) in order to receive the maximum state retirement pension, and at least 10 complete NIC years to receive any state retirement pension. An NIC gap could also mean you are denied other contribution-related benefits such as employment and support allowance, the bereavement support payment or maternity allowance (for self-employed individuals).
Your NIC credit for the year can be gained by;
Paying class 1 NI as an employee
Paying class 2 NI as a self-employed individual
Making voluntary class 3 NI contributions
Claiming an NI credit as the stay-at-home parent of young children
This is not an exhaustive list and there have been instances where NI credits have not been correctly attributed to taxpayers, so it is important to check your NI record.
How to check
A taxpayer can check their NIC record for their entire working life in their online personal tax account. This will also provide an estimate of the state retirement pension the taxpayer should expect to receive.
Tax advisers cannot access their clients’ personal tax accounts. If you cannot use a computer to view your NIC record, you should call the HMRC helpline for national insurance contributions: 0300 200 3500.
You should check your NIC record at least once per year, and particularly so in the run up to retirement.
What if I have a gap?
Contact your tax advisor who can assist with correcting any errors and discussing the potential of making top up payments to fill in gaps.
Time is of the essence so act now
Normally, you can make voluntary payments for periods in the last 6 years which would need to be filed by 5th April 2023. However, HMRC is currently allowing women born after 5 April 1953, and men born after 5 April 1951, to complete gaps in their NIC record right back to 6 April 2006. This opportunity to plug old NIC gaps closes on 31 July 2023.
Contact info@evansaccountants.co.uk for advice on this issue.