National Insurance underpayments/voluntary payments

CaitlinSophiee

Hi all,
Sorry I'm not sure if this is the correct category but I didn't know what else to put it under! But I've been looking on my online tax account and at my national insurance contributions. And on my record it says from the years 2013-2018 I didn't pay enough national insurance, and I should pay almost 3 grand to make up the shortfall. During these years I was 16-21 only working part-time throughout college and university. Obviously I'm a fair while away from retirement age, but I am aware that you need to have made a certain amount of NI contributions to access a state pension. But I also have no idea how state pensions work. If anyone could advise on whether or not I actually need to make this payment to cover the shortfall or will I eventually pay enough NI over the next 30 years to still access a state pension? Thank you! 

ewaste

You don't need to make up any shortfall, because your State Pension age will be at least 68. That leaves decades of time to accrue whatever National Insurance credits are needed. The best thing to be doing in your twenties is making sure you are a member of your employer pension scheme and are getting the maximum matching contributions. It's even worth considering who you work for if you've an interest in pensions and eventually retiring. 

Terron

Well done! For three things

1. Think about a pension when young
2. Realizing what you don't know
3. Asking for help 

As already mentioned don't worry about making up that shortfall yet. 35 full years of contributions after 2016 will get you the maximum state pension. You have plenty of time to get them. 

bostonerimus

For the 6 years I was at university I got notices from HMRC that said I could pay NI if I wanted...I ignored them and I have a 6 year hole in my NI contributions. But now I have 38 full years of contributions and qualify for the new state pension. So if the rules stay the same as they are now if you get 35 years worth of contributions you will get full pension and you have plenty of time to get to 35 years...lots of people don't start paying NI until they leave college and get a full time job.

badmemory

Well done you for taking it seriously.  As ewaste says make sure you are paying into any employers scheme.  Have a quick look say once a year to make sure you are on schedule to be able to retire (before you drop).  Do not depend on the state pension, it is a nice backup but is not enough to live comfortably on.