What happens if I haven't paid National Insurance?

Your benefits could be affected if there are gaps in your National Insurance record . National Insurance credits can help to avoid gaps in your record and protect your benefits. You can get credits if you cannot pay National Insurance contributions, for example, if: you're unable to work due to illness.

Is it worth paying voluntary NI contributions?

You may want to pay voluntary contributions because: you're close to State Pension age and do not have enough qualifying years to get or increase your State Pension . you know you will not be able to get the qualifying years you need to get the full State Pension during your working life.

What are class 3 national insurance contributions?

There are four classes of National Insurance contributions (NICs): Class 1 contributions are paid by employers and their employees. Class 2 and 4 contributions are paid by self-employed people. Class 3 contributions are voluntary NICs paid by people wanting to fill gaps in their contributions record .

How to boost your state pension?

Delaying (deferring) your State Pension Your State Pension will increase every week you delay (defer) claiming it, as long as you defer for at least 9 weeks. For every year you delay claiming, your weekly payments increase by just under 5.8%. You cannot build up this extra State Pension if you get certain benefits.

Why do some people not get full state pension?

With 40 years, the only reason you are not getting the full new state pension is because you have been contracted out. During that time you paid less NI as did your employer. In return your works pension makes up the difference. You can improve your state pension by either paying voluntary NI or getting NI Credits.

How many years of National Insurance for full pension?

To get the full basic State Pension you need a certain number of qualifying years of National Insurance. If you're a man you usually need: 30 qualifying years if you were born between 1945 and 1951 . 44 qualifying years if you were born before 1945 .

Why do I need 39 years of NI contributions?

The full basic State Pension you can get is £169.50 per week. You need 39 qualifying years of National Insurance contributions to get the full amount . You'll still get something if you have at least 10 qualifying years, but it'll be less than the full amount.

What are the disadvantages of voluntary contributions?

AVCs are very inflexible in that they are directly linked to the company pension scheme, so your money is locked up until you start drawing your company pension. Furthermore AVCs cannot be used to provide any tax-free lump sum.

Why is my pension not growing?

We've lived through a host of events in the last few years that have made things more challenging for pension savers. The COVID pandemic, war in Ukraine, higher energy prices, inflation, and rising interest rates, have created instability in the markets and reduced the value of investments and pension funds.

How to fill gaps in national insurance?

You can plug gaps by paying voluntary NI contributions . These are normally 'class 3' contributions. They could be 'class 2' if you're living and working abroad, or if you're self-employed.

What happens if you have no pension in the UK?

If you can't afford to save for a pension You may be able to pay extra amounts (contributions) into a pension fund when you are working, to make up for lost time . You'll still be able to get basic State Pension and you may be able to get other help from the state, for example help to pay your rent or council tax.

National Insurance mistake means some people could be owed thousands (2024)

If you were a stay-at-home mum before 2010, you may have missed out on thousands of pounds in state pensions because of mistakes in your national insurance record. For now, you don't need to do anything, but you will need to claim your missed state pension payments later this year.

Women who are now in their 60s and 70s are believed to be the most likely group that were unknowingly hit by this Government blunder that saw around 210,000 people – mainly women – underpaid due to gaps in their NI records. As such, they could have a claim over what was rightfully their money.

The full 'new' state pension currently sits at £203.85 a week – but not everyone gets the maximum amount. Your sum depends on how many 'qualifying' full national insurance (NI) years you have picked up over the years through working and paying NI - but you can also get them if you're claiming benefits or caring for others.

READ MORE: Spain tourists now need three extra documents to enter the country on holiday

How the issue came about

A system has been in place by the Government since the 1978/79 financial year to safeguard state pensions for those who do not earn a living from paid employment - mainly mothers - because they have chosen to raise a family instead. It was originally known as "Home Responsibilities Protection" (HRP), but in 2010, the name was changed to "National Insurance Credits".

The government has acknowledged the system has had errors, causing hundreds of thousands of people who cared for children to have gaps in their NI records that shouldn't be there. Due to the absence of the "Home Responsibilities Protection" entitlement, people affected are receiving - or will receive - an underpayment of their state pension.

There was a report published by the DWP in July 2022, which revealed that this problem was the "second largest" source of underpayments in state pensions. An investigation into the NI records relating to people who reached state pension age between 1978 and 2010 was opened and it has only just become apparent how many people might have been affected.

You could be at risk of a lower state pension due to the issue outlined above if ALL of the following apply:

You're currently aged between around 41 and 90. Those affected are mainly women in their 60s and 70s, and many will already be claiming their state pension, but others may still be under state pension age.
You took time away from paid work to look after a child at any point between 1978 and 2010.
The child you were caring for was under the age of 16 at the time (or under 20 if they were still in education or approved training).
You claimed Child Benefit for the first time before May 2000.
You didn't include your NI number on your Child Benefit claim.

You are NOT at risk of a lower state pension due to this specific issue if...

You first claimed Child Benefit after May 2000. It became mandatory in May 2000 to provide a NI number for Child Benefit claims, and your NI record will therefore have been updated automatically.

Martin writes that HM Revenue & Customs (HMRC), which is responsible for NI records, says it now "intends to begin work to identify people who may be affected". Here's what you need to know about the process:

Currently, there is no need to take action if you believe you have been affected.
From autumn this year, HMRC will start contacting people likely to have been affected "in phases", according to their age, with further instructions.
If you are eligible, you will be able to make a claim online.
Once your NI record has been updated, the Department for Work and Pensions (DWP) will recalculate your state pension and make payments for any arrears due.

However, there may be some people who are affected who will not be identified by HMRC's search. This is because Child Benefit records older than five years have now been deleted to comply with data protection. Once the initial contact has begun, HMRC may widen the search criteria, but we are not sure if people should ask for their records to be checked actively.

Story Saved

You can find this story in My Bookmarks.Or by navigating to the user icon in the top right.

National Insurance mistake means some people could be owed thousands (2024)

How the issue came about

You could be at risk of a lower state pension due to the issue outlined above if ALL of the following apply:

FAQs

What happens if I haven't paid National Insurance? ›

What happens if you have no pension in the UK? ›