Surge in people paying voluntary NICs
16th October 2019
The number of people paying voluntary national insurance contributions (NICs) has boomed in the last two years.
Statistics published by HMRC showed that £119.3 million was paid in voluntary class 3 NICs in 2018/19, compared to £69.1m the previous year.
Just £12.8m was paid into the national insurance fund in 2016/17, which represents a 93% increase over the last two tax years.
The surge could reflect the introduction of the new state pension in 2016, which enables people to boost their pension through voluntary contributions.
Employees have NICs deducted through payroll each month, while the self-employed can make class 3 NICs that go towards their state benefits.
Anyone can plug any gaps in their national insurance record from the previous six tax years, although only a small number of people contributed to these figures.
Steve Webb, director of policy at Royal London, said:
"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."
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