Date posted: 2nd May 2024
Paying National Insurance contributions allows individuals to earn qualifying years, which in turn provides them with entitlement to the state pension and certain contributory benefits.
Entitlement may also be provided by the award of National Insurance credits.
State pension entitlement
A person reaching state pension age on or after 6 April 2016 needs 35 qualifying years to benefit from the full state pension. A person who has less than 35 qualifying years but at least ten on reaching state pension age will receive a reduced state pension.
It is important to check your National Insurance record to see if you will qualify for the full state pension. This can be done online by visiting www.gov.uk/check-state-pension.
Any gaps can be filled in by paying voluntary contributions.
Class 3 voluntary contributions
Class 3 National Insurance contributions are voluntary contributions which can be paid to buy additional qualifying years to boost your state pension.
Class 3 voluntary contributions must be paid within six years of the end of the tax year to which they relate, so by 5 April 2030 for 2023/24 contributions.
Individuals reaching state pension age on or after 6 April 2016 who have missing years between 6 April 2006 and 5 April 2016 (2006/07 to 2015/16) can benefit from an extended window in which to pay contributions for those years. Contributions must be paid by 5 April 2025 to qualify.
Making voluntary contributions is only worthwhile if, after making the contributions, you have at least ten qualifying years. If you have missing years but will secure 35 qualifying years by the time you reach state pension age, there is no point in making voluntary contributions.
It is certainly worth checking that you are going to receive the maximum state pension, when you reach retirement age.
If you do have any queries, please give us a call.
