If you've got gaps in your National Insurance contributions record, your entitlement to the basic State Pension and certain bereavement benefits could be affected. You may want to consider filling in the gaps by paying voluntary National Insurance contributions.
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The amount of basic State Pension (and certain bereavement benefits) you're entitled to is based on your National Insurance contributions record over your working life from age 16 until State Pension age. This record is made up from National Insurance contributions paid and/or credited to you in each tax year. A minimum amount of contributions and/or credits is required to make each year count as a 'qualifying year' towards your overall contributions record.
There could be gaps in your National Insurance contributions record for various reasons. For example, you may have been:
This depends on when you reach your State Pension age.
|Number of qualifying years||Men||Women|
|If you reach State Pension age on or after 6 April 2010||30||30|
|If you reached State Pension age before 6 April 2010||normally 44||normally 39|
You may also be able to get National Insurance credits for times when you cannot work or don’t earn enough to pay National Insurance because you are caring for someone. These credits could count towards a qualifying year or reduce the number of qualifying years needed for a full State Pension. Find out more by following the links below.
If you don't have the full number of qualifying years at State Pension age the amount you'll receive will depend on the date you reached State Pension age and the number of qualifying years you've built up.
You can get an idea of how many years you have to date and how much State Pension you may have built up under current State Pension law by following the link below.
You'll get 1/30th of the full basic State Pension for each qualifying year you have. In practice this means that any number of qualifying years will give you entitlement to at least some basic State Pension.
So if, for example, you had ten qualifying years you would be entitled to 10/30th of the full basic State Pension.
If you reach State Pension age after 6 April 2016 the Government is proposing to simplify the State Pension. The proposals - if accepted will bring in different rules to work out your State Pension and will affect men born on or after 6 April 1951 and women born on or after 6 April 1953. Until the rules change it will be more difficult for you to decide whether topping up your contributions will improve your future State Pension. Before deciding to top up your contributions or to fill any gaps in your record you should find out more about the proposals to change State Pensions by following the link below.
There are a number of ways you can find out:
If you reach State Pension age before 6 April 2016 you may receive a letter from HM Revenue & Customs (HMRC) telling you there is a gap in your record. These letters are generally sent out between September and January each year. The letter isn't a bill - but it will tell you how much you can pay if you want to fill the gap and how you can pay if you opt to do so.
If you reach State Pension Age after 6 April 2016, and have gaps in your National Insurance, HMRC won't send you a 'Gap in your National Insurance record' letter. This is because, subject to Parliaments approval, the Government plans to simplify the State Pension. Until these changes are implemented in 2016, it will be more difficult for you to decide whether paying for any gaps in your record will improve your future State Pension.
The Department for Work and Pensions (DWP) Future Pension Centre can provide you with a State Pension Statement that will give you an estimate of your State Pension based on current rules. Once you have this they can also tell you whether there are any gaps in your National Insurance contributions record.
You can also ask HMRC for a statement of your National Insurance account. It will tell you how much, if anything, your gap is, whether you are able to make up that gap, and how you can pay if you wish to do so.
If you've lived abroad you can ask the Department for Work and Pensions (DWP) - The Pension Service to check your record for any gaps, they can also provide you with information about your State Pension entitlement under current State Pension law - follow the link below.
It's up to you whether you make up any gaps. However, remember that because the number of qualifying years you need for a full basic State Pension was reduced to 30 for people reaching State Pension age on or after 6 April 2010 but before 6 April 2016, you'll need to consider carefully whether you need to top up at all. It may not always be right or beneficial for you to top up by paying voluntary contributions as your entitlement to basic State Pension depends on how much you’ve already contributed and the date you reach State Pension age.
At the same time, you'll need to bear in mind the effect on certain bereavement benefits of not topping up - see the next section on this for more information.
If you reach State Pension age on or after 6 April 2016 you should also consider the Government's proposals to simplify the State Pension. The proposals - if accepted will bring in different rules to work out your State Pension. These changes will not affect anyone reaching State Pension age before 6 April 2016.
HMRC recommends that you find out about your State Pension entitlement to help you decide - find out how to do this in the section above.
If you're unsure, the Citizens Advice Bureau or a number of other free organisations may be able to help you - or you could consult a financial adviser (but bear in mind they might charge you).
If you reach State Pension age on or after 6 April 2010 eligibility for bereavement benefits (payable, if someone dies, to their spouse or civil partner if under State Pension age, and based on the deceased's National Insurance contributions) is different to the eligibility for basic State Pension. For bereavement benefits, it remains at up to 39 qualifying years for a woman and up to 44 for a man. You may want to take this into account when deciding whether or not to top up your National Insurance contributions.
You should also consider the Government's proposals for simplifying the future State Pension as these include plans to reform bereavement benefits. The proposals mean you would receive the full benefits if your late spouse or civil partner paid National Insurance contributions at 25 times the Lower Earnings Limit for any one year before they died. The changes will not affect anyone reaching State Pension age before 6 April 2017.
You usually have to make up the gaps within six years of the end of the tax year for which the National Insurance contributions are being paid. However there are extended time limits for some tax years and special rules if you reach State Pension age either between 6 April 2008 and 5 April 2015 or after 6 April 2016.
For more information on deadlines, and the extended time limits, for paying voluntary National Insurance contributions read our guide 'When and how to pay voluntary National Insurance contributions' by following the link below.