Personal Finance

State pension shock as Britons finding their National Insurance contributions don't count

People who work for decades to build up their state pension entitlement so they can get the full amount when they retire may be shocked to discover that some of their contributions did not count.

National Insurance contributions are massively important because they directly impact how much state pension people can get when they reach state pension age.

State pension age is currently 66 in the UK for both men and women.

The current value of the full new state pension is £179.60 per week, which provides recipients with a yearly income of £9,339.20.

However, not everyone will get the full amount, as they need 35 qualifying years of National Insurance contributions in order to be eligible for the maximum weekly income.

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There are specific rules in place which define what allows Britons to get a qualifying year of NI contributions, and being aware of these parameters could help people avoid a shock when they reach state pension age.

One of the requirements that must be met relates to how much someone earned in a given tax year. Tax years run from April 6 to April 5.

Employees must earn £120 a week for the 2021/22 tax year in order to be eligible for a qualifying year. Alternatively, they can earn £520 each month or £6,240 for the year.

The rules are slightly different for people who are self-employed individuals.

They will require £125 per week, £542 a month or £6,515 per year to be able to get a qualifying year.

An obvious piece of criteria which must be met in order to get a qualifying year is that an individual must have paid National Insurance for the year, at the correct amount.

People who could be particularly vulnerable falling short when it comes to NI contributions are those who have an income which regularly fluctuates.

They may consequently earn a qualifying year during some tax periods, but not others.

Britons who are on a lower income or work part time may also be at risk.

Anyone who is concerned about their NI record can easily check online via the Government website to see where they stand.

They will be able to view:

  • How much they have paid up to the start of the current tax year
  • Any National Insurance credits they have received
  • If there are any gaps in their contributions or credits, meaning some years do not count
  • If they can pay voluntary contributions to fill any gaps and how much this will cost.


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