In certain circumstances it can be beneficial to make voluntary National Insurance Contributions (NICs) to increase entitlement to future benefits, including the State or New State Pension for self-employed persons.
You might want to consider making voluntary NICs if:
- You are close to State Pension age and do not have enough qualifying years to get the full State Pension
- You know you will not be able to get the qualifying years you need to get the full State Pension during the remainder of your working life
- You are self-employed and do not have to pay Class 2 National Insurance contributions due to a history of low profitability
- You live outside the UK but want to qualify for benefits.
If you fall within any of these categories, it may be beneficial to apply for a State Pension forecast and examine whether you should consider making voluntary NICs to make up missing years, known as topping up. Not everyone will benefit from making voluntary NICs and much will depend on how close you are to retirement age and your NIC payments to date.
Usually, HMRC allow you to pay voluntary contributions for the previous six years. The deadline is 5 April each year. This means that you have until 5 April 2023 to make up for gaps for the tax year 2016-17.
There are also transitional measures in place that allow men born after 5 April 1951 and women born after 5 April 1953 to make up for gaps in NICs between tax years April 2006 and April 2016. This opportunity ends on 5 April 2023 when the maximum allowable number of voluntary contributions will be limited to six years as per the previous paragraph.
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