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mind the gap on underground sign | accountingweb | NIC payment gap concession extended again
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Deadline for paying class 3 NIC extended again

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The national insurance contribution payment gap concession has been extended again, giving taxpayers a further 22 months to boost the amount of state pension they will be eligible for.

15th Jun 2023
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The government is giving taxpayers a further 22 months to fill gaps in their national insurance contribution (NIC) record and hence boost the amount of state pension they will be eligible to receive.

Many people don’t realise that they have years for which they didn’t pay NIC for the full 52 weeks, and thus have a gap in their NIC record, until they reach state pension age (SPA). At that point the taxpayer may be shocked to find they are not entitled to the full state pension. 

Individuals who reach SPA on or after 6 April 2016 need 35 full years of NIC in order to receive the maximum state retirement pension, and at least 10 full NIC years to receive any state retirement pension at all. 

Those taxpayers who reached SPA before 6 April 2016 qualify for the old state pension where the qualifying NIC periods were different for men and women, with a minimum of 10 years for women born before 1950 and 11 years for men born before 1945. 

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Replies (7)

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By scubajoe
16th Jun 2023 10:35

The headline "Deadline for paying class 3 NIC extended again" doesn't mention class 2 contributions, does the extended deadline also apply to that?

Thanks (0)
Replying to scubajoe:
Head of woman
By Rebecca Cave
19th Jun 2023 08:25

HMRC has confirmed that the extension does also apply to class 2 NIC, payable by self-employed and those who live abroad, but who have lived in the UK for at least 3 years or paid at least 3 years of NIC in UK.

Thanks (1)
By Nebs
16th Jun 2023 10:43

Beats me why the government allow people to buy these extra years, and at such a huge discount.

Thanks (0)
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By Not Anonymous
16th Jun 2023 10:58

"Individuals who reach SPA on or after 6 April 2016 need 35 full years of NIC in order to receive the maximum state retirement pension, and at least 10 full NIC years to receive any state retirement pension at all"

Nonsense.

People starting to build up qualifying years from 2016 need 35 years.

Everyone else is under transitional rules where the number of qualifying years which gets you to £203.85/week could range from less than 30 to 50+ years.

Thanks (1)
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By unclejoe
16th Jun 2023 11:26

May I ask Rebecca a question. This is a hypothetical case but approximates a real one. Sally is 37 and has worked, on and off, for 20 years, in a wide variety of part-time and short term jobs. She is currently not working. She believes that she has paid NIC in 16 of those years, but has not kept records. A request to to the Pensions office shows that she has accumulated 6 years pension credit. She does not know why this is so low, but suspects that it is because in most years, while NIC was paid it was not paid for a full year, so does not qualify. With 28 years remaining to SPA she is a year short, but with backdating voluntary contributions allowed she does not have to address this immediately. How should she approach challenging this, and might she have a case? And what happens if the SPA is reduced or the 35 years increased in future? She may find that having planned and paid her voluntary contributions she still does not get a full pension. Or, she may pay the VC and find that she would have got a full pension without having to pay. As you say, this is an investment decision, but one that seems to potentially impossible to make in a rational way. All very unfair. Thank you.

Thanks (2)
Replying to unclejoe:
Head of woman
By Rebecca Cave
16th Jun 2023 15:01

Sally needs to check her personal tax account ( https://www.gov.uk/personal-tax-account) to see extactly where the gaps in her NIC record are. Challenge gaps with HMRC where she thinks she was working for the full year, or claiming state benefits, which should given an NIC credit .

Sally's state pension age is now at least 67 , check using her birth date here: https://www.gov.uk/state-pension-age . So she has 30 years yet to work before she gets her state pension. That gives her plenty of time to make up the extra year.

Howeve, gaps can normally only be filled for the last 6 tax years, so if she has a year which is only slightly short of NI contributions between 2006/07 and 2017/18 inclusive, she may be able to pay a small amount of class 3 to make up that year.

Thanks (1)
Replying to Rebecca Cave:
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By Hugo Fair
16th Jun 2023 18:03

It might seem obvious to those in the know ... but I rarely encounter a member of the public (or indeed family) who understands *how* to 'make up' a part-year to a full year of entitlement.

Thanks (4)