Voluntary National Insurance Contributions: State Pension Top-Up Before April 2025

As a payroll company, we understand how crucial accurate National Insurance (NI) contributions are for securing a full State Pension. However, gaps in NI records are common, and can impact retirement income.

You can usually pay voluntary contributions for the past six years. The deadline is 5 April each year. However if you want to make voluntary contributions for the tax year 2016 to 2017 or 2017 to 2018, the government is offering a limited-time opportunity to top up missing contributions with the deadline extended until 5 April 2025.

This article explains why pay related gaps occur, how to check your NI record, and how to make voluntary contributions.

Why Might PAYE Employees Have Gaps in NI Contributions?

Even employees consistently on PAYE payroll may have gaps in their NI records due to:

  • Earnings Below the NI Threshold: If an individual’s salary was below the Lower Earnings Limit, no NI contributions would have been recorded.

  • Periods of Part-Time or Irregular Work: Individual’s with fluctuating income may not have met the contribution threshold in certain years.

  • Career Breaks or Unpaid Leave: Maternity leave, career breaks, or periods of unpaid leave can lead to missing NI contributions.

  • Freelance or Contract Work: Individual’s who moved between PAYE and self-employment may have gaps if they did not pay Class 2 or Class 3 contributions.

  • Payroll Processing Errors: In rare cases, incorrect reporting of NI by an employer or missed submissions can result in gaps.

Why Should You Address NI Gaps?

Addressing National Insurance (NI) gaps is important because it directly affects your state pension eligibility and other benefits. Here’s why you should take action:

1. Ensure You Get Your Full State Pension

  • To qualify for the full new State Pension, you need 35 qualifying years of NI contributions.

  • If you have fewer than 10 years, you may not receive any state pension at all.

2. Avoid Paying More Later

  • You can voluntarily pay NI contributions to fill gaps, but rates may increase over time.

  • Addressing gaps sooner can save money.

3. Prevent Financial Shortfalls in Retirement

  • A reduced state pension means less financial security in later life.

  • Every missing year can lower your weekly pension amount.

How to Check National Insurance Contributions

Before making voluntary contributions, individuals should check their NI record. This can be done in several ways:

  1. Online via the Government Gateway:

    • Visit the Check Your State Pension page: https://www.gov.uk/check-state-pension

    • Sign in using a Government Gateway account.

    • View NI records and identify missing years.

  2. Contact the Future Pension Centre:

    • If you are under State Pension age, call 0800 731 0175 for a forecast.

  3. Request a National Insurance Statement:

    • Request a statement from HM Revenue & Customs (HMRC) to verify contributions.

How to Pay Voluntary Contributions to Fill Gaps

If gaps are identified, individuals may be able to make Voluntary Class 3 National Insurance contributions to fill them. If you were self-employed in the past, you may need to pay Class 2 contributions, which are more affordable.

Steps to Pay Voluntary Contributions:

  1. Confirm the Years That Need to Be Paid

    • Contact the Future Pension Centre or HMRC to confirm that topping up will enhance your pension.

  2. Check the Cost

    • For the 2024/25 tax year, Class 3 contributions cost £17.45 per week (around £907 per full year).

    • Class 2 contributions (for eligible self-employed individuals) cost £3.45 per week (around £179 per year).

  3. Make the Payment

    • Online or by Bank Transfer:  HMRC’s bank details for voluntary contributions.

    • By Cheque: Payments can be sent to HMRC National Insurance Contributions and Employer Office.

    • Through Self-Assessment: Individuals may be able to pay via their tax return.

  4. Wait for Confirmation

    • It may take several weeks for NI records to be updated.

Check Your National Insurance Contributions

The April 2025 deadline presents a unique opportunity to fill any historical gaps in your NI contributions.  You may qualify for NI credits due to caring responsibilities, Universal Credit, or other benefits, reducing the need for voluntary contributions.

By checking NI records, addressing discrepancies, and considering voluntary payments, you can ensure you receive your full State Pension entitlement.

Check your NI record: https://www.gov.uk/check-national-insurance-record

Seeking professional financial advice or contacting government pension services is strongly recommended before making any payments.

Pension top up
Mascolo & Styles