More time to pay missing National Insurance Contributions
Newsletter issue – April 2023
In March we reminded you to check whether your national insurance contribution (NIC) record contains any gaps, and how this could affect entitlement to the state retirement pension. The deadline for paying voluntary Class 3 NIC to fill any NIC deficiencies in tax years back to 2006/07 had been set at 5 April 2023.
However, to make the payment of NIC online taxpayers need to call HMRC, and their phone lines have been overloaded with the large numbers of people wanting to pay the class 3 NIC required. As many people have been unable to get through to HMRC, the Government has extended the deadline for payment of class 3 NIC to 31 July 2023, to cover all periods back to 6 April 2006.
This opportunity to pay class 3 NIC for past years applies to women born after 5 April 1953 and men born after 5 April 1951, so roughly people aged up to age 70.Those taxpayers aged under 45 will still have another 22 to 23 years of working life in which to pay class 1 or class 2 NIC, so it is unlikely that it would be economical for them to pay class 3 NIC to complete any existing gap years.
The other piece of good news is that the Government is allowing taxpayers to pay class 3 NIC at the 2022/23 rate (£15.85 per week) until 31 July 2023, rather than the 2023/24 rate of £17.45 per week.
Remember paying voluntary class 3 NIC is effectively an investment decision. You need to decide whether paying extra NIC now will give you sufficient extra state pension over your expected lifetime to make the payment worthwhile.
Check with the Department of Work and Pensions to confirm whether paying voluntary class 3 NIC for particular years will increase your pension: call 0800 731 0175 if you are below the state pension age or 0800 731 7898 if you've reached the state pension age.
