The new flat rate State Pension started on 6 April 2016.
The amount of State Pension you are entitled to receive when you reach your State Pension age is based on your National Insurance contributions record and the number of ‘qualifying years’ you have accumulated. You need 35 ‘qualifying years’ to obtain the maximum amount payable.
Employers will deduct tax and National Insurance contributions (NICs) from your wages. They will also pay the Employer’s National Insurance Contributions to HMRC each month.
Errors on your HMRC NICs record can mean that you could miss out on a full State Pension or other benefits to which you are entitled. If your employer is not paying National Insurance to HMRC, then this could affect your benefit rights. If you have payslips showing tax and N.I. deductions and P60 forms showing your total pay, tax and NICs for each tax year then you can ask HMRC to credit you with the contributions deducted from your wages.
Everyone should check their National Insurance record periodically to make sure that it is correct.
There are two main places you can check your NI record
- On the DWP’s ‘check state pension’ page,
which gives you your full, year-by-year NI record plus a forecast of your state pension.
- On HMRC’s ‘check your national insurance record’ page
Any year where you have been in employment (or self-employment) for the whole year and paid the relevant NI contributions should show as a ‘full year’, as should any year where you qualified throughout for NI ‘credits’.
Years marked as ‘not full’
Some years may show as ‘not full’ as opposed to years where the description is ‘Full Year’.
Sometimes it can be correct that a year is ‘not full’. Examples can include:
- Where you only worked part year and didn’t earn enough in that period to build up a full year’s worth of NI contributions.
- Where you were outside the UK and not paying NI contributions.
- When you were in full time higher education e.g., studying at a University for a Degree subject.
- Where the ‘wrong’ person in a couple claims child benefit, with the result that the associated NI credit goes to the higher earner, rather than the person at home with the children who needed the credit.
- If you paid the reduced ‘married woman’s stamp’ rate of NI contributions for that year.
- If you think there is simply an error in your record – for example you know that you worked a full year and paid N.I. but the year is shown as ‘not full’ – then you should contact HMRC and challenge this.
- If you have paperwork such as a P60 end of year tax statements, which will also show the amount of National Insurance deducted from your pay, this can help to resolve matters.
- If you think you should have been getting NI credits for any given year, then you should also query this with HMRC.
Keeping P60 information in your Personal Records
A P60 End of Year Certificate helps you check that your employer is using the correct NI number and deducting the right rate of NICs.
It shows how much you’ve been paid in a given tax year and will also show the tax and NICS taken out of your pay through Pay As You Earn (PAYE).
PAYE is the income tax system used by HMRC for taxing your earnings in the UK.
An employer has a duty to give a P60 to all employees on their payroll who are working for them on the last day of the tax year (5 April). An employer must give you a P60 by 31 May following the end of the previous tax year.
The information contained on your P60 is evidence of the money you’ve been paid by your employer and the tax and NICs deducted. If any queries arise it is much easier to sort them out if you have your P60 to hand.
You should check your P60s on receipt and keep them each year with your personal papers. Resolving problems relating to tax and NI for any year(s) for which you no longer have any paperwork can be difficult (if not impossible).
I’ve lost my P60s what can I do?
If you've lost your P60(s) from a previous year you should contact your employer and explain why you need copies. You may be required to write to your employer to formally ask for them.