What Are Voluntary National Insurance Contributions?

Voluntary National Insurance Contributions are payments made by individuals who want to fill gaps in their National Insurance contribution record. This can be necessary if you have not paid enough NICs in a certain tax year or have gaps in your contribution record due to unemployment, illness, or other circumstances.

There are several types of voluntary NICs available, including:

• Class 2 NICs: Weekly contributions that self-employed individuals can choose to pay to ensure they qualify for the State Pension and other benefits.
• Class 3 NICs: Voluntary contributions that individuals can make to fill gaps in their National Insurance record.
• Additional Class 3 NICs: Payments that can be made to increase an individual's State Pension entitlement above the level they would otherwise receive based on their National Insurance record.

Who Is Eligible to Make Voluntary National Insurance Contributions?

Anyone with gaps in their National Insurance record can make voluntary NICs if they meet the eligibility criteria for the relevant type of contribution. This includes self-employed individuals, people who have been out of work, and those who have reached their State Pension age but do not have enough qualifying years of National Insurance contributions.

Therefore, you might want to consider making voluntary NICs if:

• You are close to State Pension age and do not have enough qualifying years to get the full State Pension
• You know you will not be able to get the qualifying years you need to get the full State Pension during the remainder of your working life
• You are self-employed and do not have to pay Class 2 National Insurance contributions because they have low profits
• You live outside the UK, but want to qualify for some benefits.

How Do You Make Voluntary National Insurance Contributions?

To make voluntary National Insurance Contributions, you need to contact HM Revenue and Customs (HMRC) and request a statement of your National Insurance record. This will show you any gaps in your contribution history and help you determine which type of voluntary NICs you need to make. You can also check your NICs online; please follow our guide on how to check your National Insurance Contribution Records online.

The process of making voluntary NICs can vary depending on the type of contribution you need to make. For Class 2 and Class 3 NICs, you can make payments online, by phone, or by post. Additional Class 3 NICs can only be paid by post.

The extended time limit for making voluntary NICs

It's important to note that there are time limits for making voluntary NICs. Usually, HMRC allows you to pay voluntary contributions for the past 6 tax years. The deadline is 5 April each year. However, there is currently an opportunity for people to make up for gaps in their NICs for the tax years from April 2006 to April 2017 as part of transitional measures to the new State Pension.

This deadline was set to expire on 5 April 2023 but has now been extended until 31 July 2023 after the government took on board significant public concern that many taxpayers would not meet the deadline.

What Are the Benefits of Making Voluntary National Insurance Contributions?

Making voluntary National Insurance Contributions can have several benefits, including:

• Improving your eligibility for certain state benefits, such as Jobseeker's Allowance and Employment and Support Allowance.
• Increasing your entitlement to the State Pension, which is based on the number of qualifying years of National Insurance contributions you have.
• Protecting your entitlement to bereavement and other state benefits based on National Insurance contributions.

If you would like more advice and assistance with your National Insurance Contributions, please contact us at info@gkaccountingservices.com

or call us on 01269 518 815, where we will be more than happy to answer any of your questions.