Paying missing national insurance contributions (NIC) in the UK – what do you need to know?
Gaps in social security contributions can have serious consequences for the amount of the future state pension in the UK. People who have not paid National Insurance Contributions (NIC) in the past can pay them voluntarily to increase their future pension.
However, it is worth remembering that there are specific deadlines for making such payments. What are the rules and how can you make sure you don’t miss a key date? Here is everything you need to know.
Why is it worth paying the missing contributions?
The British pension system is based on the number of years in which a person has paid NIC contributions. To be eligible for a full State Pension, you must have at least 35 years of contributions. Those with fewer years may receive a pension or, if they have accumulated less than 10 years, they will not receive any pension at all.
If there are gaps in your contribution history, filling them in may:
- increase your future state pension – the greater the number of contribution years, the higher the pension.
- provide access to specific benefits, e.g. certain types of social security.
- increase financial stability in retirement, because each contribution year can affect the amount of funds received.
How can I check my contribution gaps?
First, it is worth checking your contribution history. You can do this online at HM Revenue & Customs (HMRC) or contact them directly. This will tell you if you have any missing years and whether you can fill them up.
What are the current deadlines for paying contributions?
As standard, you can pay the missing contributions for the last six years – this means that in 2025 you will be able to make up the contributions for the tax years 2019/20 to 2024/25.
However, in some cases, the government offers extended deadlines for earlier periods – especially in connection with the 2016 pension reform. People who reached retirement age after 6 April 2016 may be able to pay extra for years dating back as far as 2006. However, this option is only available until 5 April 2025, after which it will no longer be possible to pay extra for previous years.
How much does it cost to pay outstanding contributions?
The amount depends on the class of contributions you have to pay. In most cases, it is:
- Class 2 NIC – lower contributions for the self-employed (approx. £3.45 per week in the 2023/24 tax year).
- Class 3 NIC – Voluntary contributions, mostly used to fill gaps (approx. £17.45 per week in the 2023/24 tax year).
It is worth remembering that the sooner you decide to pay extra, the less it may cost – contributions from previous years may be cheaper than current ones.
How do I make a payment?
- Check your contribution history on the HMRC website or contact an HMRC representative.
- Talk to an Essence Accounting expert – we will help you determine whether it is worth paying the surcharge.
- Apply for a voluntary contribution top-up – you can do this online or by post.
- Make your payment according to HMRC instructions.
Is it worth paying the missing contributions?
Remember that each case should be considered individually – before making a decision, it is worth calculating whether the additional contributions will bring measurable benefits. In some situations, it may turn out that the additional payment will not significantly affect the amount.
If you have NIC contribution gaps, it is worth checking your options for making up the shortfall as soon as possible. The key date for making up contributions for the years up to 2006 is 5 April 2025 – after this date, this option will no longer be available. For standard contributions, you have six years from the relevant tax year. Want to maximise your future pension benefit? Contact the Essence Accounting team and see how we can help you.
