In many circumstances it can be beneficial for taxpayers to make voluntary Class 2 National Insurance Contributions (NICs) to increase their entitlement to benefits, including the State or New State Pension if they are self-employed.
Taxpayers might want to consider making voluntary NICs because:
- They are close to State Pension age and do not have enough qualifying years to get the full State Pension
- They know they will not be able to get the qualifying years they need to qualify for the full State Pension during their working life
- They are self-employed and do not have to pay Class 2 contributions because they have low profits or live outside the UK, but want to qualify for some benefits
There is also a specific list of jobs where Class 2 NICs are not payable. These are:
- examiners, moderators, invigilators and people who set exam questions
- people who run businesses involving land or property
- ministers of religion who do not receive a salary or stipend
- people who make investments for themselves or others – but not as a business and without getting a fee or commission
If you know any taxpayers that fall within any of these categories it may be beneficial to get a State Pension forecast and examine whether they should make voluntary Class 2 NICs to make up missing years.