Voluntary NICs

If you have an incomplete National Insurance Contributions (NICs) record, this can reduce the amount of basic state pension (BSP) you receive at retirement. However, in some circumstances, you can make good any gaps by paying Voluntary NICs, thereby helping you qualify for, or improve, your entitlement.

Voluntary NICs (known as Class 3 NICs) can be paid for any tax year in which you were over 16 and not liable to pay Class 1 NICs and/or Class 2 NICs. In some circumstances, you can also pay voluntary NICs whilst living abroad.

You cannot, however, pay voluntary NICs if you are a woman who has elected to pay the reduced rate NICs for the whole of a tax year.

The payment of voluntary NICs helps towards:

• Basic State Pension
• Widowed parent's allowance
• Bereavement payment
• Bereavement allowance

Qualifying years required

The BSP is a flat-rate pension paid to anyone who has paid enough National Insurance Contributions or has enough credits when they reach their SPA.

If you reached your SPA on or after 6 April 2010

The full rate of BSP is payable if you have 30 qualifying years on your National Insurance record.  If you have less than 30, you will receive a proportionately lower BSP (i.e. if you have 23 qualifying years, your BSP will be 23/30ths of the full amount).  You only need one qualifying year to get some BSP.

If you reached your SPA before 6 April 2010

The full rate of BSP was payable if you had 39 (for women) or 44 (for men) qualifying years.  The minimum BSP (25% of the full amount) was payable if you had 10 (women) or 11 (men) qualifying years.

Normal rules for paying voluntary NI contributions

Ordinarily, you can only pay voluntary NICs for any of the previous six tax years.  However, there have been some concessions to pay other years.

1996/97 to 2001/2002

This was only available if you reached your State Pension Age (SPA) between 6 April 1998 and 24 October 2004.  The deadline for making payment was 5 April 2010 so it is now too late.

2002/03 onwards

For the tax years 2002/03 onwards, the normal time limits for the payment of voluntary NICs apply. This means you must pay within six years of the end of the tax year in which voluntary NICs were due. The payment dates are:

• 2002/03 tax year is 5 April 2009 (it is now too late to pay for this year)
• 2003/04 tax year is 5 April 2010 (it is now too late to pay for this year)
• 2004/05 tax year is 5 April 2011 (it is now too late to pay for this year)
• 2005/06 tax year is 5 April 2012 (it is now too late to pay for this year)
• 2006/07 tax year is 5 April 2013
• 2007/08 tax year is 5 April 2014
• 2008/09 tax year is 5 April 2015
• 2009/10 tax year is 5 April 2016
• 2010/11 tax year is 5 April 2017
• 2011/12 tax year is 5 April 2018
• 2012/13 tax year is 5 April 2019

Click here for a schedule showing the deadline and costs of paying voluntary NI contributions.

Additional rules in force since 6 April 2009

Since 6 April 2009, it has been possible to pay up to a further six years of voluntary NICs, over and above those detailed in the above section, to help boost the BSP entitlement.  The criteria for paying these further contributions are:

• Your State Pension Age (SPA) must be between 6 April 2008 and 5 April 2015;
• You can only pay for missing years going back to 6 April 1975; and
• You must already have at least 20 qualifying years (including Home Responsibilities Protection) on your NI record

Click here for a schedule showing the deadline and costs of paying voluntary NI contributions. 

Cost of paying voluntary NI Contributions

The cost depends on the tax year being credited and the tax year of actual payment.

• If you pay voluntary NICs in the same tax year where there is a gap or during the two years after, the rate will be the one that applied during the year you are trying to make up. For 2012/13, the rate is £13.25 a week.
• If you pay after the second year after the year you have missed, or later, you will pay a higher rate.  This being the rate applicable in the year that you actually hand over the money.

All voluntary NICs paid in respect of the additional rules in force from 6 April 2009 (see above) will cost the higher rate.

Click here for a schedule showing the deadline and costs of paying voluntary NI contributions.

Refund of voluntary NICs

It is possible, under very limited circumstances, to get a refund of voluntary NICs that you may have paid.  Those circumstances are, either:

1.  You meet all of the following:

• You reach State Pension age on or after 6 April 2010;
• You paid voluntary NICs on or after 25 May 2006 but before 26 July 2007 or, if living in Northern Ireland, you paid voluntary NICs on or after 25 May 2006 but before 11 February 2008; and
• You were not aware of the (then proposed) change to 30 qualifying years when you paid. This means that at the time you paid the voluntary NICs HMRC had not sent you information about the (then proposed) change.

2. You meet all of the following:

• You reach State Pension age on or after 6 April 2010;
• You paid voluntary NICs on or after 26 July 2007 or, if living in Northern Ireland, you paid voluntary NICs on or after 25 May 2006 but before 11 February 2008:
• You already had 30 (or more) qualifying years for your basic State Pension (and therefore entitlement to full basic State Pension) when you paid voluntary NICs; and
• You paid the voluntary NICs only to increase the rate of your basic State Pension

New! Voluntary National Insurance Contribution Planner

This planner will help you make a decision about whether or not to boost your Basic State Pension (BSP) by paying Class 3 National Insurance Contributions (NICs).

Click here to use the Voluntary National Insurance Contribution Planner

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