Voluntary class 3 National Insurance contributions soared to £391.9 million in the year ended 31st March 2023.
It marks an impressive 85% jump on the previous year’s total of £212.3 million.
Class 3 contributions are voluntary contributions that can be used to fill gaps in national insurance records to boost state pension entitlement. Individuals can normally fill gaps going back six years but there has been the opportunity for some people to fill gaps going back to 2006.
The deadline for making extra top ups was extended to April 2025, after a surge in interest overwhelmed the Department for Work and Pensions.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “A quick glance at these accounts shows why DWP helplines went into meltdown earlier this year as Class 3 contributions leapt an incredible 85%. The extra time will be welcomed by those who faced long call waiting times and with an online process expected next year, we can expect many more people to take advantage of this great opportunity.”
How much state pension an individual receives is based on their National Insurance record and pensioners require 35 years’ worth of contributions for a full state pension.
To understand what clients can expect and identify any gaps they may need to fill, clients should check their state pension forecast online.
According to Hargreaves Lansdown, clients with gaps should check to see if they qualified for a benefit such as Child Benefit or Universal Credit that come with a voluntary National Insurance credit.
Men born after 5 April 1951 and women born after 5 April 1953 have until 5 April 2025 to buy voluntary national insurance credits dating back to 2006. However, clients should check with the DWP Future Pension Centre to make sure they will really benefit from the extra credit. Those who were contracted out at any point during their working life may find they are entitled to less state pension and paying for extra National Insurance contributions will not help.
