Gaps in National Insurance record

expl0rer · 21 September 2018 at 12:03AM

On the website where I file my tax returns, the NI section shows gaps for some years.

Here is what it looks like:

2011-12 Year is not full
You did not make any contributions this year

Find out more about gaps in your record and how to check them.

You can make up the shortfall

Pay a voluntary contribution of £[...] by 5 April 2023. This shortfall may increase after 5 April 2019.

Find out more about voluntary contributions.

One thing is that this statement is incorrect for some years - my employer did make NI contributions and I have P60's to show that.
For other years, it's true that I didn't make any contributions, but it's also my understanding that I didn't have to (I wasn't employed and I wasn't running a business).

Now I'd like to understand if I need to contact them to correct my record, and what can happen if I don't correct it and don't make voluntary contributions?

00ec25 · 21 September 2018 at 7:57AM

the purpose of your NI record is to show how many qualifying years you have towards your state pension . Reach the required total and you will get a "full" state pension. Have less then the required total and your pension will be reduced.

The page you were looking at tells you what size pension you will get if you do X years.

It can be hard to decide whether the difference between £165 per week and say £130 per week is worth making a voluntary contribution to catch up with, only you can decide that as only you "know" what other pension planning you have done. However, as one comment said on a similar thread recently, an extra £35 per week in retirement is £1,820 per year so how many years do you expect to live in retirement: 5? 10? 15?. Multiply £1820 by those years and compare that total against the class 3 voluntary cost because that is the true cost of making up the gap.

also of course we have no idea how old you are and therefore whether the gaps matter. If you are 25 then you'll still have enough working years left to make the threshold anyway, even with a few gaps. Obviously not the case when older.
so...
yes of course dispute the record if you have evidence it is wrong. Just bear in mind it is qualifying YEARS. A year is recorded if your total NI paid that year was above the threshold for that year. If you were low paid or part time it is possible to pay NI but not reach a full year, so have nothing showing.

yes you "didn't have to" if you were not working, but on the same logic you cnn't expect to get a pension from your choice that year

expl0rer · 21 September 2018 at 10:00AM

Thanks for the thorough response, 00ec25.

I understand I may not get a full pension. My concern was whether those gaps in my record (which are wrong as far as I can tell) could get me in any kind of trouble. I don't want to receive a bill in 10 years with NI arrears, interest and penalties I won't be able to afford.

If there is no such threat, I don't see much point in disputing the record?

uknick · 21 September 2018 at 3:03PM

It'll be unlikely they'll come chasing you for missing years of PAYE contributions. I'm missing years from 2012 to 2018 due to early retirement and I've never given it a second thought other than, is it worth buying additional years to get a better pension? If you think about it, it's not really in HMRC/UK Plc's interest to do it; you'll probably get more in pension than you pay in backdated contributions.

If I was in your shoes, I would dispute the calculation if you think you've paid for years but not received them. What does it cost apart from a little time?

Gaps in National Insurance record

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