Surge in voluntary National Insurance contributions
23 October 2019
The number of people paying voluntary National Insurance contributions has surged in the last two years, official data has shown.
According to HM Revenue & Customs, £119.3 million was paid in voluntary Class 3 National Insurance Contributions in the 2018/19 tax year, a ninefold increase on the £12.8 million paid in 2016/17.
Royal London said that while a small amount of voluntary NICs is accounted for by people filling gaps to protect their entitlement to short-term benefits, the majority of payments is likely to reflect the introduction of the new state pension in 2016 which gives large numbers of people the opportunity to boost their pension through voluntary contributions.
Steve Webb, director of policy, Royal London, said: “It is great news that the message is getting out there that topping up your state pension can be a very effective way of using your money.
“For those who will not otherwise get a full state pension, the cost of voluntary NICs will often be recovered in full within three or four years of retirement, as the rate is heavily subsidised by the government. But it is important to be careful which years are bought back, as in some cases paying extra NICs will not always increase your pension.”
ATEB Consulting’s Steve Bailey looks at how the FCA’s view of suitability and what that means in practice for...
Paraplanners who have been furloughed and are concerned that their company will not have a job for them should...
The Supreme Court has ruled that a pension transfer made in ill health should not be subject to inheritance...