Taxpayers are being urged to check their National Insurance contribution (NIC) records before 5 April when HMRC will reduce the number of years they can backdate contributions.
Taxpayers can currently make voluntary contributions to plug gaps back to April 2006, but HMRC will limit this to the previous six tax years – the previous timeframe before an extension.
This means that in the 2023/24 tax year, it will only be possible to make contributions going back to the 2017/18 tax year.
Taxpayers often pay NICs for previous tax years to ensure they qualify for the new state pension by having 35 years of qualifying NICs or part of the pension by having 10 years of payments.
However, the number of required years of NIC contributions and credits may be higher to obtain the full state pension for taxpayers whose NIC record started before 6 April 2016.
The Institute of Chartered Accountants for England and Wales said:
“To protect state pensions and other benefits, it may be beneficial for people to make voluntary NI contributions to top up their contribution history, potentially increasing the amount of state pension they will receive.”
Talk to us about your NIC record.