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Pensions and retirement planning
National Insurance and your State Pension forecast
Your State Pension forecast may be affected by National Insurance (NI) rules. Find out about the new rules for topping up your NI contributions, reduced rate NI and when you have to pay NI. If you need further help you can contact HM Revenue & Customs.
National Insurance arrears – error in forecast
If your online State Pension forecast contains information about arrears of National Insurance contributions, there may be an error in the information in your forecast notice.
If you have more than six years of gaps in your National Insurance (NI) records, the forecast notice you received will read "...out of the last 6 tax years." This section should read "...out of the last 12 tax years".
The Pension Service is working to fix this problem.
Paying National Insurance
Working
Even if you already have enough qualifying years to get a full basic State Pension, you have to pay National Insurance until you reach your State Pension Age if you:
- work for an employer and your wages are above a certain level
- are self-employed and you do not have a small-earnings exemption certificate.
Not working
You can decide to stop paying NI contributions if both of the following apply:
- you are paying voluntary National Insurance contributions because you are not working
- you have enough qualifying years to get a full basic State Pension
If you stop paying voluntary NI contributions, this may affect any bereavement benefit that your widow, widower or surviving civil partner is entitled to.
Bereavement benefit entitlement
You will need to have enough qualifying years in your working life to give your widow, widower or surviving civil partner full rate bereavement benefit. This is normally about 90 per cent of the qualifying years in your working life.
Reduced rate National Insurance
In the past, married women and some widows could choose to pay a reduced rate of National Insurance contributions as an employee, or choose not to pay Class 2 National Insurance contributions when self-employed. This was called the married women’s or widow's election.
Although this stopped in 1977, women who were already paying the reduced rate could continue to do so.
Reduced rate contributions do not count towards the State Pension, and you can't get Home Responsibilities Protection for any period covered by a Married Women’s or Widow's Election.
You will stop paying reduced rates if you:
- get divorced or your marriage is annulled (officially cancelled)
- stop being entitled to certain bereavement benefits
- ask to stop paying the reduced rate
You will also stop paying reduced rates if, for two tax years in a row, you have:
- not earned enough to pay, or been treated as paying, National Insurance contributions as an employee
- not been self-employed
If you need advice about a Married Women’s or Widow's Election, contact HMRC.
Time spent at university
You will not receive credits for any time spent at university. You will receive credits automatically for the tax years during which you had your sixteenth, seventeenth and eighteenth birthdays if these fell on or after 6 April 1975 and you were in full time education, unpaid apprenticeship or training.
Working abroad and social security contributions
Your forecast does not include any social security contributions you may have paid when working abroad.
If you paid social security contributions while working in a country that is in the European Economic Area or has a social security agreement with the UK then they will be considered when you claim your State Pension.
For more information contact the International Pension Centre.
Topping up your State Pension
If your forecast shows that you may not receive a full basic State Pension, you may want to top up your State Pension by making voluntary NI contributions. This may be useful if you have missed paying contributions, for example because you weren't working, or were abroad. Details will be included in your forecast if this applies to you.
New rules for Voluntary Class 3 National Insurance contributions
From 6 April 2009, new rules allow you to pay additional Voluntary Class 3 NI contributions. This can help you to top up your contributions towards your State Pension. You can do this for any six years from 6 April 1975, if:
- you reach State Pension age between 6 April 2008 and 5 April 2015
- you already have 20 qualifying years (including years of Home Responsibilities Protection)
You cannot pay the additional Class 3 NI contributions for any tax year if the whole year is covered by a married women’s or widows’ reduced rate election.
The new rules do not affect any Voluntary Class 3 NI contributions you may be able to pay under existing rules.
Further questions
If you have any further questions about your NI contributions or credits, contact HMRC.
