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Plugging NIC gaps
Newsletter issue – March 2023
Many people don‘t realise that they have significant gaps in their National Insurance Contribution (NIC) record, and as a result they won‘t be entitled to the full state retirement pension. This can come as a shock when you start to receive your state pension, but by that time it may be too late to fill the gaps in your NIC record.
A taxpayer needs 35 complete NIC years (as payments or national insurance credits) in order to receive the maximum state retirement pension, and at least 10 completed NIC years to receive any state retirement pension.
You can easily check your NIC record for your complete working life on your online personal tax account on gov.uk (https://www.gov.uk/personal-tax-account).
If your NIC record shows there are gaps, don‘t assume the record is completely correct. You need to investigate the reason for any gap and challenge HMRC to look for missing NI contributions or credits.
It is not uncommon for NI credits to be missed by HMRC for periods where you were claiming child benefit or universal credit, and not working. You should have been given NI credits automatically for these periods. In other circumstances (e.g., when acting as foster carer, or a grandparent caring for a child), you need to apply for NI credits.
Where there is a genuine a gap in your NIC record you can normally go back up to six years and pay voluntary contributions to fill in the missing weeks to make a tax year complete for NIC. For example, gaps in your NIC record for the tax year 2016/17 can be filled by voluntary payments made before 6 April 2025.
However, currently there is a special dispensation that allows women born after 5 April 1953 and men born after 5 April 1951, to complete gaps in their NIC record right back to 6 April 2006. This opportunity to make up these old years with voluntary NIC payments closes on 5 April 2025, so there is not much time to take action!
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
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