The Institute advised that taxpayers should check their national insurance contributions record in their online tax account to ensure that their credits, or ‘ticks’, are being applied correctly.
People generally need 35 years of national insurance contributions or credits to qualify for the full state pension, with one tick is applied each year. Credits are awarded when certain benefits, such as universal credit, are claimed, as well as when contributions are paid or credited on income from employment and self-employment.
Those who are self-employed and earn above the small profits threshold of £6,725 in the tax year should receive a credit automatically. Self-employed people earning below that threshold can pay Class 2 contributions voluntarily to receive national insurance credits, which count towards the state pension and some other benefits.
Caroline Miskin, ICAEW Senior Technical Manager, Digital Taxation, said: “It’s important you check that your national insurance contributions and credits have been registered every year, so you don’t miss out on the state pension and other benefits.
“You need 35 years of national insurance contributions to qualify for the full state pension, and you may need to consider making voluntary contributions.
“Your national insurance record can be viewed online or on the HMRC app, and checking you have the right number of national insurance ticks should only take a few minutes. Don’t wait until you reach state retirement age to find you are short.”
Meanwhile, self-employed people are reminded of changes to their Class 2 and 4 national insurance contributions which come into effect on 6 April. Class 4 contributions are being reduced by 3%, which could save taxpayers up to £1,131 over the tax year, while the abolition of Class 2 contributions could save up them to £179.40 over the same period, although in both instances taxpayers won’t see the benefit until January 2026.
ENDS
Notes to editors:
- Class 2 national insurance contributions entitle taxpayers to: the basic state pension; new state pension; contribution-based employment and support allowance; maternity allowance; and bereavement support payment.
- See National Insurance credits: Overview - GOV.UK (www.gov.uk) for further information.