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Last updated: 28 Jun 2022
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Could a National Insurance gap impact your pension?

Gaps in your National Insurance Contributions (NICs) could lead you to fall short of the State Pension entitlement and certain benefits. However, you may be able to plug the gaps to secure your financial future. Here’s how to maximise your State Pension. 

Your National Insurance record will determine your entitlement to certain state benefits, with the most prevalent being the State Pension. The amounts due to you on retirement will be dependent on the number of ‘qualifying years’ that you have built up over your lifetime. 

When it comes to your State Pension, a qualifying year refers to a tax year during which you have sufficient employment earnings (currently £123 per week), or certain qualifying benefits    qualifying for certain ‘NIC credits’. At present, ten qualifying years will guarantee you the minimum State Pension, and 35 years will secure you the maximum entitlement.

Many people are unaware of gaps in their record, and you would not be alone if you assumed that this was only a concern for unemployed individuals or those with lower earnings; however, you can accumulate gaps for a number of other reasons.

About the author

Akin Coker

+44 (0)20 7556 1332
cokera@buzzacott.co.uk

Your National Insurance record will determine your entitlement to certain state benefits, with the most prevalent being the State Pension. The amounts due to you on retirement will be dependent on the number of ‘qualifying years’ that you have built up over your lifetime. 

When it comes to your State Pension, a qualifying year refers to a tax year during which you have sufficient employment earnings (currently £123 per week), or certain qualifying benefits    qualifying for certain ‘NIC credits’. At present, ten qualifying years will guarantee you the minimum State Pension, and 35 years will secure you the maximum entitlement.

Many people are unaware of gaps in their record, and you would not be alone if you assumed that this was only a concern for unemployed individuals or those with lower earnings; however, you can accumulate gaps for a number of other reasons.

Have you ever worked abroad?

Have you ever worked abroad?

If you have had a period of time working outside of the UK, it is worth reviewing those periods to see whether you had been paying the local equivalent of that country’s social security contributions, instead of UK NICs. In doing so, you may have created a gap in your UK NIC record and consequently fall short of the State Pension entitlement that you were expecting.

Have you taken a career break?

Have you taken a career break?

If you have taken a career break – for example, to care for loved ones or live off a windfall or inherited wealth, you may have a hole in your record. Likewise, there may be gaps in NICs for those with fluctuating profits if there are periods of particularly low profits or losses. In such cases, it is easy to overlook potential gaps and fall short of the crucial number of qualifying years.

For those with gaps in their NIC record, all is not lost!

For those with gaps in their NIC record, all is not lost!

This is where voluntary NICs come into play. If eligible, you can plug the gaps in your NIC record to restore your State Pension entitlement by way of voluntary contributions. You should note, however, that HMRC will generally only allow you to remedy gaps within six years of the end of the tax year in which the gap occurred, so action should be taken sooner rather than later.

Get in touch
Get in touch 

You should regularly check your National Insurance position to ensure that no gaps appear in your record. If you would like to assess whether voluntary contributions may be of benefit to you, please fill out the form below. 

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