In April 2023, we gave you the good news that the government had extended the deadline for paying voluntary national insurance contributions (NIC) to fill gaps in an NIC record which arose in the years 2006/2007 to 2016/17, from 5 April 2023 to 31 July 2023. Now that later deadline is fast approaching the government has extended the payment period once more to 5 April 2025.
Voluntary NIC is usually paid as class 3 NIC, but where the taxpayer is self-employed or lives and works abroad, class 2 NIC can be paid instead. The extension for voluntary payments of NIC applies equally to class 2 and class 3 NIC.
What’s more, the voluntary NIC payments can be made at the 2022/23 rates for all years from 2006/07 to 2022/23, ie:
- Class 2 NIC: £3.15 per week
- Class 3 NIC: £15.85 per week
These NIC gaps became more important because the number of qualifying years needed for a full state pension increased from 30 years to 35 years for those who reach state pension age (SPA) on and after 6 April 2016, and became entitled to the new “flat-rate” state pension. Hence the government permitted those individuals to fill gaps in their NIC records with voluntary class 3 NIC beyond the normal six-year period.
This extension to the payment the period only applies to men born after 5 April 1951 and women born after 5 April 1953, as those born earlier were entitled to the old state pension which has different payment conditions.
The NIC gap problem can also affect parents who would be entitled to claim child benefit, but didn’t submit a claim to avoid getting caught by the high-income child benefit charge (HICBC). If the parent claims child benefit, then opts out of receiving the child benefit payment, they are given an NI credit if they are not also in paid employment or self-employment. However, where child benefit is not claimed, the NI credit is not given, and an NIC gap can arise.
If you want to make a one-off payment to fill any gaps in your NIC record you need to include an 18-character reference number so the payment is allocated to the right NIC record. But to get that reference number you need to ring HMRC on: 0300 200 3500.