National Insurance Record for State Pension

During your working life you earn credits towards state benefits – specifically a State Pension.

There are lots of ways to earn these credits and some earn you more pension than others.  Additionally the rules have changed over the years so the best way to see what you have earned is to get a forecast and check your record.

This can easily be done on your HMRC personal tax account, available via the Government Gateway.  See https://www.gov.uk/check-state-pension.

You can see and check what is on record for you and it there is anyway to improve what you are going to get.

 Issues you may wish to address: –

• Have you already achieved the maximum or do you need to act?
• Are there omissions – you may need to be chased up errors e.g. if employer did not report correctly.
• Are there gaps in your record – what were you doing?
• Possible entitlement to claim extra credits – to fill gaps or increase pension.
• Are you currently receiving all the credits you are entitled to?
• What is your current forecast?
• Will you get to the maximum before your reach state pension age?
• Can you earn/pay extra contributions to get to the maximum?
• Could you pay voluntary contributions to increase your pension or is it not worthwhile? And if so for which years?

What you need to get a full state pension

• 35 years of credits
• If you have credits for 75% of the tax year then that should count as a full year’s credit, but less and it may count for nothing.

How you may earn credits automatically

• Directors earn a credit for the year if they earn enough that tax year – nothing if not.
• Employees earn one credit every pay period (per month or per week) if they earn enough that pay period.
• Self-employed must pay National insurance which includes a credit for the year if they earn over a certain limit.
• From 2022/23 Self-employed earn a credit for the year if they earn enough, which is less than the level to pay national insurance.
• Those unemployed and claiming job seekers get credits each week of claim.
• Registered to receive child benefit for a child under 12, then you get credits – but take care: –
  • this is only the first named person registered; however such credits may be transferred to spouse or partner.
  • if expecting to repay child benefit (because the higher earning partner earns over £60,000) then you may have decided not to register for child benefit, but you would then not get credits either. To get credits you need to register for Child Benefit, and then disclaim so as not to receive the child benefit that would then need to be repaid.
• On a government sponsored training course of less than 1 year & over 18
• Claiming Carers allowance

When you can apply for credits

• Spouse or partner accompanying a member of the armed forces on an overseas posting
• Unemployed actively seeking work
• On statutory sick pay, maternity allowance, or Incapacity benefit
• Full time approved training course of less than 1 year & over 18
• Registered foster carer
• A carer for more than 20 hours per week
• HMRC can top up the years between ages 60 & 65 for men born before 6/10/53.

Finally you can pay for credits – you need at least ¾ of a years’ worth of credits to count as a year.  If short or missing a year, then you can pay to top up to 100% to get your years credit.

• Self-employed can voluntarily pay for credits if they do not earn enough (currently £3.45pw) – includes self-employed who have gone aboard or to prison.
• Anyone can pay voluntary contributions to top up to a full year (currently £17.45pw)

Warning: – you can usually only top up the last 6 years – but there is a special offer on from HMRC at present where you can top up any year since 2006, if you do it before 5^th April 2025.

Check your state pension now and have a happy retirement.