State pension
Could you be eligible for a refund?

People who made extra contributions to get a full state pension could be eligible to claim a refund after a Government U-turn.

Each year tens of thousands of people, particularly women, pay extra National Insurance Contributions (NICs) to make up for time they have been off work or abroad. A cut in the number of qualifying years required to receive a full basic state pension could mean that some people have over-contributed by paying more than they needed.

In January of this year, the Government announced that where individuals had continued to make voluntary NICs since 25 May 2006, they might be entitled to a refund. This unfortunately will not include the refund of any payments made before May.

Paying voluntary NICs

Women need 39 to 44 qualifying years to get the full basic state pension. For men the target is 44 years.

People usually earn these by paying NICs when they are working, but there are other ways to gain an entitlement to a state pension. Most men are credited with NICs each year between the ages of 60 and 65, even if they don’t make any contributions. This means that they have to work and pay NICs for only 39 years. However, women do not qualify and from 2010 this will be phased out for men.

If you are married, you can take your husband’s or wife’s NIC record into account. Carers looking after children under 16 or a sick or disabled person can also claim ‘home responsibilities protection’, which cuts the qualifying years they need.

If, after this, you still have a broken contribution record, you can pay voluntary or Class 3 NICs to make up for years you have missed. You can pay extra for the gaps in your record going back to 1996. After 2009, you will be able to backdate for six years.

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This article is for your general information and use only and is not intended to address your particular requirements. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without appropriate professional advice after a thorough examination of their particular situation. Your home may be repossessed if you do not keep up repayments on your mortgage.

Article date: 03.07