Gap in your National Insurance accounts and the payment of voluntary National Insurance contributions

Contents

Why have I received a DN letter (gap letter)?

We have sent you this letter as your National Insurance record shows that you have not paid or been credited with enough National Insurance contributions in the tax year(s) shown on the letter. The tax year(s) shown may not be qualifying years for benefit or basic State Pension purposes.

It gives you the opportunity to tell us if you think your record is wrong so that we can correct it.

The letter also shows you how much voluntary Class 3 contributions you would need to pay if you want the year(s) to count as qualifying for basic State Pension and bereavement benefit purposes.

Is this letter a demand for payment or a bill?

No. It is not a demand for payment or a bill. It is a letter notifying you that a particular tax year(s) does not qualify for benefit purposes, because not enough National Insurance contributions were paid or credits awarded. Whether you pay voluntary contributions to make this year qualifying is up to you.

How much are voluntary Class 3 National Insurance contributions?

You can find the latest information on our rates and allowances pages.

I have received a letter this year but what about previous tax years?

Each year we carry out an exercise like this so we would have contacted you at the time if previous years were not qualifying for benefit purposes.

I was in full-time employment for a period where no National Insurance contributions are recorded on my National Insurance account?

There may be several reasons why the letter has been sent to you, for example:

  • no contributions were deducted
  • the contributions have not been recorded on your National Insurance record
  • National Insurance contributions have been deducted by the employer but not sent to HM Revenue & Customs (HMRC)

Please contact us on Tel 0845 915 5996 the lines are open 8.00 am to 8.00 pm, Monday to Friday and 8.00 am to 4.00 pm on Saturday. You can also write to us or complete the ‘Additional Information’ that was enclosed with the letter and send it to:

HM Revenue & Customs
National Insurance Contributions Office
Benton Park View
Newcastle upon Tyne
NE98 1ZZ

If possible, send us a copy of your P60 for the relevant tax year.

I was receiving benefit for a period where no National Insurance contributions or credits are recorded on my National Insurance account?

Please contact us on Tel 0845 915 5996 the lines are open from 8.00 am to 8.00 pm and 8.00 am to 4.00 pm on Saturday. You can also write to us or complete the Additional Information that was enclosed with the letter and send it to:

HM Revenue & Customs
National Insurance Contributions Office
Benton Park View
Newcastle upon Tyne
NE98 1ZZ

If your query is about one of the following benefits, please contact the Jobcentre Plus office:

  • Incapacity Benefit
  • Industrial Injuries, and only where this includes an Unemployability Supplement
  • Jobseekers Allowance
  • Maternity Allowance
  • Severe Disablement Allowance

I was not working because I was looking after a child or a sick or a disabled person?

If you reach State Pension age before 6 April 2010 and you have cared for a child or a sick or a disabled person or you were a registered Foster Carer during the year(s) covered by the letter, you may be entitled to Home Responsibilities Protection (HRP). HRP can reduce the number of qualifying years you need for a full basic State Pension by up to 50 per cent. This means that you probably will not need to pay voluntary National Insurance contributions for years covered by HRP.

If you reach State Pension age on or after 6 April 2010, HRP will be replaced by a new system of weekly contribution credits from April 2010. Further information on the changes to HRP can be found on The Pension Service website under the “Parents and carers” section.

Any periods of HRP recorded on your National Insurance account before 6 April 2010 for years that are not qualifying will be converted (whole tax years only) into Class 3 credits to make the year(s) qualifying (maximum of 22 years). The date of this conversion exercise is autumn 2009. As a result of this a decision has been made not to issue a letter about any gap to customers reaching State Pension age on or after 6 April 2010 who have a period of HRP on their record, as we cannot estimate their 'qualifying years' accurately in advance of HRP conversion. If you should have received a gap letter for the 2005-06 or 2006-07 year we will inform you of your position at a later date.

What happens if I am entitled to HRP for periods which are now deficient?

HRP will reduce the number of qualifying years you need for a full basic State Pension if you reach State Pension age before 6 April 2010 and it might not be beneficial for you to make up the gap. A pension forecast may help you decide. To request a pension forecast please visit the Pension Service website or contact them on Tel 0845 3000 168.

If your letter does not show that you had HRP you can either download the form CF411 (PDF 138K) from our website or we can send you the form to complete.

If you reach State Pension age on or after 6 April 2010 the enclosed flyer provides advice on what action to take if you think you are entitled to HRP.

I cannot afford to pay this all at once. Can I pay by instalments?

Normally Class 3 voluntary contributions cannot be paid by instalments.

However if the gap is for a tax year from 1996-97 to 2001-02, special arrangements mean that you may be able to pay by instalments. To make arrangements you can contact us on Tel 0845 915 5996 the lines are open from 8.00 am to 8.00 pm, Monday to Friday and 8.00 am to 4.00 pm on Saturday. You can also write to us at:

HM Revenue & Customs
National Insurance Contributions Office
Benton Park View
Newcastle upon Tyne
NE98 1ZZ

I would like to pay but not right now. How long do I have?

You can make back payments of Class 3 National Insurance contributions for previous years, but you need to pay before the end of the sixth tax year following the one in which they were due. If you pay after six years, any payments made will not count, for benefit purposes unless the payment is for one or more of the following tax years 1996-07 – 2001-02 when you have until:

  • 5 April 2009 to pay if you reached State Pension age on or after 24 October 2004
  • 5 April 2010 to pay if you reached State Pension age between 6 April 1998 and 24 October 2004
    to pay. No higher rate charge will apply for the tax years 1996-97 to 2001-02 if contributions are paid within these time limits.

For the tax years 2002-03 onwards, the normal time limits for the payment of voluntary contributions apply. This means you must pay within six years of the end of the tax year in which voluntary contributions were due. The payment date for the:

  • 2002-03 tax year is 5 April 2009
  • 2003-04 tax year is 5 April 2010
  • 2004-05 tax year is 5 April 2011
  • 2005-06 tax year is 5 April 2012
  • 2006-07 tax year is 5 April 2013

If you want to pay voluntary contributions from 6 April 2002 – 5 April 2006, you should not delay as you may have to pay at a higher rate. The voluntary contribution payment rate can increase after the end of the second tax year following the tax year in which the voluntary contributions were due. If you want to pay after this date please get in touch with us first. This means if the gap is for the 2004-05 tax year the voluntary contribution rate changed from the 6 April 2007.

If you reach State Pension age on or after 6 April 2010 and want to pay voluntary contributions for the 2005-06 tax year, it has been agreed that the higher rate charge will not be applied and contributions will be able to be paid at the original rate. The normal time limit for payment still applies.

If you reach State Pension age on or after 6 April 2010 and have entitlement to Home Responsibilities Protection for any tax year, the higher rate charge will not be applied and contributions will be able to be paid at the original rate.

I am retired now but I think I may have gaps in my National Insurance record. Will I get a letter?

If you reached State Pension age on or between 6 April 1998 and 24 October 2004, The Pension Service will have written to you if

  • you were not in receipt of a full basic State Pension in your own right
  • you were not in receipt of a basic State Pension; and you
  • had gaps in your National Insurance record in any of the tax years 1996-97 to 2001-02
  • you would have benefited by paying National Insurance contributions in one or all of the deficient years above
  • you would have received a Deficiency letter under the existing rules

If you retired after the 24 October 2004, and you are not in receipt of a full basic State Pension the Pension Service should have checked your National Insurance record at the time you made your claim to State Retirement Pension. If you could have benefited from paying Class 3 contributions they should have advised you. If you have any queries, please contact the Pension Service helpline on Tel 0845 6060265.

What if I pay and then change my mind. Can I have my money back?

Not necessarily. The circumstances in which we can give you back your money are limited; there is no automatic right to refund. So it is important that you consider carefully before deciding to pay, including getting a State Pension forecast.

The Pensions Act 2007 (in Northern Ireland, the Pensions Act (Northern Ireland) 2008), which became law on 26 July 2007, makes changes to the United Kingdom basic State Pension system. In the main, these changes will only affect you if you reach State Pension age on or after 6 April 2010. Therefore, before you make any decisions to pay voluntary Class 3 contributions you must read the important information carefully.

If I don’t pay, will I be taken to Court, or have a bad credit rating against me?

No. The letter is not a demand for payment, and no follow up action will be taken.

Should I pay the amount shown on the letter as I am due to retire within the next few months?

You should contact your local Department for Work and Pensions office, or the Pension Service helpline on Tel 0845 6060265 and they will be able to advise you whether to pay or not, and how it will affect your pension.

I have received a letter advising that I have a shortfall for the 2006-07 tax year. My employer has advised me that he has sent his 2006-07 Employer Annual Return to HMRC. Why are my contributions not recorded on my National Insurance account?

National Insurance details from some 2006-07 employer returns are still in the process of being recorded on individual accounts. When your National Insurance contributions are recorded on your account HMRC, dependant on the earnings and NI recorded, will issue a letter to tell you that the 2006-07 tax year is now a qualifying year for benefit purposes. If you do not want to wait for this letter, or you are unsure about your NI position, you can send a copy of your 2006-07 P60 to the address shown on the letter you have received and we will investigate.

I want to start paying Class 3 contributions, how do I do this?

If you would like to start paying voluntary contributions you can find further information by following this link.

Class 3 National Insurance contributions (Voluntary National Insurance contributions)

The information in this link will help you decide whether or not you are entitled to pay. If you feel that you meet the criteria, please complete the application form under 'How to pay Class 3 National Insurance contributions', which can also be found on the link provided.