Taxpayers are now far more aware of their NIC record as it is easy to view when they access their online personal tax account. This will tell the taxpayer if they have any tax years where they have not paid sufficient NIC for the year to qualify as a credit for the state retirement pension.
Where the gaps have arisen in the last six years, they can be completed by paying voluntary class 3 NIC or in some cases class 2 NIC. The last day to pay contributions for 2011/12 would normally be today: 5 April 2018.
However, the government has made a number of exceptions to this six-year rule to allow people to boost their state pension entitlements.
Those who qualify for the old state pension because they reached state pension age between 6 April 2010 and 5 April 2015, can pay voluntary NIC to fill gaps in their records for any periods back to 1975. The individual must already have 20 qualifying years of NIC payments or credits. The NIC can be paid at any time up to six years after the individual reached state pension age.
Those who will receive the new flat rate state pension from 6 April 2016 onwards, can pay voluntary NIC for any gaps arising in the years 2006/07 to 2015/16. These top-up payments must be made by 5 April 2023, but reduced rates of NIC apply if the payment is made by 5 April 2019.
Written by the Tax Advice Network