Note: this blog was updated on 10 March 2023 following the Government's extension of the deadline from 5 April 2023 to 31 July 2023.

The Government has recently announced an extension to the deadline for individuals to check their National Insurance Contributions (NICs) record and consider whether to make additional contributions.  The extended deadline will end on 31 July 2023. 

If there is a shortfall of NIC contributions for a particular year, voluntary contributions can be made in order to maximise entitlement to the UK state pension and other benefits.

NICs are paid by employed and self-employed earners and are based on their earnings for the year. The contributions paid each year make up the individual’s contribution record and these ”NIC credits” are used to calculate their entitlement to the UK state pension and other benefits. NIC credits can also be obtained by individuals who are not in work but are claiming certain state benefits.

An individual is required to pay (or be deemed to have paid) sufficient NICs for at least 10 years in order to claim the UK state pension. Each year is known as a qualifying year with the maximum entitlement to a UK state pension being based on 35 qualifying years. Where insufficient contributions have been made for a year, an individual may opt to pay NICs on a voluntary basis. If the voluntary contributions are made, that year will qualify for the purposes of calculating the future entitlement to the UK state pension. Voluntary contributions currently amount to £15.85 per week.

Previously, it was only possible to make voluntary contributions for the previous six tax years.  When introducing the new state pension in 2016, the Government extended the window for making such contributions so that an individual could go as far back to 6 April 2006 to top up their NIC contribution record. This temporary extension was due to end on 5 April 2023 but will now end on 31 July 2023, after the public voiced concerns over the 5 April 2023 deadline.

The rate of voluntary NICs is due to increase from the current rate of £15.85 per week to £17.45 per week from 6 April 2023. The Government has confirmed that any voluntary payments made between 6 April 2023 and 31 July 2023 will be made at the lower rate of £15.85 per week.

After the 31 July deadline, the time limit will revert back to the usual period of six years and this means that an individual will only be able to make voluntary contributions for the tax years 2017/18 onwards

Ahead of this deadline for making good any shortfall in contributions, it is imperative that individuals review their contribution record and where a shortfall is identified for a particular year, take the appropriate advice as to whether voluntary contributions should be made.    

Next steps

Should you wish to discuss further, please get in touch with a member of our Private Client Tax team, Wealth team, or your usual Johnston Carmichael adviser, If you require a summary of your National Insurance Contribution record to date then the HMRC website can assist.