Voluntary National Insurance Contributions
Are you moving back from abroad & not made National Insurance contributions?
Have you or someone you know lived outside of the UK for a prolonged period of time? If so, you have likely had a break in contributing national insurance payments and could be at risk of not being able to claim the full state pension.
In order to claim state pension an individual must have met a minimum number of qualifying years of contributions. Therefore, if you have lived outside of the UK for an extended period you may not have paid any contributions and therefore would have a break in your qualifying years.
Luckily, HMRC give you a chance to correct this issue and allow the ability to make up unpaid NIC years. However, this does come with a caveat, the ability to back pay is generally within the past 6 years with some exceptions.
Why may you want to pay voluntary contributions?
- You are close to state pension age and do not qualify
- You know you have not/will not meet the minimum qualifying years
- You are self-employed and do not have to pay Class 2 contributions due to profits
- You live outside of the UK but want to qualify for various NI related benefits
With all this in mind, increasing voluntary contributions does not always increase your state pension. Therefore, it is important to get advice as to whether this is beneficial and also, which classes of national insurance are required in order to make up the gaps.
For further information on filling gaps in your National Insurance or other personal or employment tax questions please contact us here at Arnold Hill for advice.
The information in this article is believed to be factually correct at the time of writing and publication, but is not intended to constitute advice. No liability is accepted for any loss howsoever arising as a result of the contents of this article. Specific advice should be sought before entering into, or refraining from entering into any transaction.