Voluntary National Insurance contributions

Our experts at DSR Tax Refunds know how hard it is to find good, quality information about HMRC’s National Insurance regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

Why would you need to make voluntary National Insurance contributions?

For a number of reasons, you might find that you have gaps in your National Insurance record – that means that in that particular tax year (or years), you haven’t paid enough National Insurance for that year to count as a ‘qualifying year’ towards any contributions-based benefits, including your State Pension. If you are entitled to claim National Insurance credits, these will prevent your National Insurance record showing gaps for the period you are entitled to claim the credits. The reasons your National Insurance record might have gaps include because you were employed but on low earnings; unemployed and not claiming benefits; living abroad or self-employed and not paying contributions because your profits were too low.

Gaps in your National Insurance record can mean that you haven’t paid enough in National Insurance contributions over the years to get a full State Pension, but you might be able to fill in those gaps by making voluntary contributions. You need to check your eligibility though – not everyone is eligible to make voluntary National Insurance contributions.

You can check your National Insurance record for gaps by logging on to your personal tax account on the GOV UK website. You can also write to HMRC requesting your National Insurance record. This record will tell you if you have any gaps and whether you can make voluntary contributions to fill in those gaps. If you are able to do so, the record will also tell you how much you will need to pay in voluntary contributions. If you think your National Insurance record is wrong, you need to contact HMRC as soon as possible to get it corrected.

There are certain circumstances in which you may also be entitled to National Insurance credits so you don’t lose your eligibility to contribution-based benefits. This might be because you are claiming unemployment benefits or because you are caring for someone who is sick or disabled.

Why might you want to pay voluntary contributions?

You may decide that you want to make voluntary National Insurance contributions for a number of reasons. Maybe you are close to the State Pension age and don’t currently have enough qualifying years in your National Insurance record to get a full State Pension. Maybe you are self-employed and don’t make enough profit to pay Class 2 contributions, but you want to make sure you will still qualify for a State Pension when you retire. Or maybe you know you won’t be able to get enough qualifying years in your record during your working life and you want to make sure your pension rights are protected.

There are also a group of self-employed people who don’t have to pay Class 2 National Insurance contributions but want to make voluntary National Insurance contributions to ensure they keep their eligibility to the State Pension and other benefits. These self-employment groups are:

• Religious ministers who don’t receive a salary or stipend

• People who run property or land-based businesses

• Examiners, invigilators, moderators or people who set exam questions

• People who make investments for themselves or for others but not as part of a business and who don’t receive a fee or commission for their services.

Who is eligible to make voluntary National Insurance contributions?

You can usually only make voluntary contributions for gaps in the last 6 years of your National Insurance record, although exceptions are sometimes made depending on your age (basically, if you are already of State Pension age).

The following table shows the eligibility rules for making voluntary National Insurance contributions:

Situation	Which class to pay
Employed but earning less than £118 per week and not eligible for National Insurance credits	Class 3
Self-employed but with profits below £6,475	Class 2 or Class 3 (they count towards different benefits)
Both employed and self-employed, with both low earning and small profits	Contact HMRC for information on how to increase your contributions
Self-employed in one of the special employment groups detailed above	Class 2 or Class 3 (they count towards different benefits)
Living and working abroad	Class 2 – but you can only make voluntary contributions if you worked in the UK immediately before leaving and you have previously lived in the UK for 3 years in a row or paid 3 years of National Insurance contributions
Living abroad but not working	Class 3 – but only if at some point you have lived in the UK continuously for 3 years or paid 3 years of National Insurance contributions
Unemployed and not claiming benefits	Class 3
Married woman or widow who stopped paying reduced National Insurance rates	Class 3
If you have reached State Pension age and want to fill in gaps in your National Insurance record	Class 3

You must be eligible to pay these voluntary contributions for the time period that your voluntary contributions cover in your National Insurance record. If you are receiving National Insurance credits, you won’t be eligible to make voluntary National Insurance contributions – likewise, if you are a married woman or widow paying reduced rates of National Insurance.

What are the rates of voluntary National Insurance contributions?

How much you would be expected to pay in voluntary contributions depends on the class of voluntary National Insurance contribution you are making. The rates for tax year 2020/21 are as follows:

• Class 2: £3.05 per week

• Class 3: £15.30 per week

Sometimes you might be expected to pay different rates, for example, if you are paying Class 2 contributions for a previous year (or Class 3 for the previous 2 years) you will pay the original rate for those tax years, not the rate for this current year.

If you are a man born after 5^th April 1951 or a woman born after 5^th April 1953, you can pay voluntary contributions up to 5th April 2023 – you will pay the current rate of contribution.

How do you pay voluntary National Insurance contributions?

There are a number of payment methods you can use when you are making voluntary National Insurance contributions outside of the Self Assessment system. You can pay online, by phone, at a bank or building society, by cheque through the post or by Direct Debit. Our handy guide to payment methods will help you decide which way is the most convenient and suitable for you.

How can DSR Tax Refunds help?

We know that deciding whether to make voluntary National Insurance contributions can be a complicated affair, even with our helpful guide to tell you everything you might need to know. It’s all very well reading about it and knowing what HMRC’s stand on it is – but how do you apply that to your own circumstances? It can seem like an absolute minefield but help is always available and you don’t need to battle through this alone. Our team of experts at DSR Tax Refunds are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax relief. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

This page was last updated on 15/09/2020.

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