News
May 2010
NI Contributions Go Missing
Each year up to two million people who have paid National Insurance contributions do not get these credited against their account for future state benefits. Over the years this has accumulated to around 118 million contributions, which cannot be correctly allocated to individual contributors.
This means that when the Department for Work and Pensions (DWP) comes to calculate entitlement to state retirement pension they may not have a complete record of all of the contributions made. This may become less significant now that only thirty ‘qualifying years’ are required in order to attain the full state pension.
In addition, at present the DWP computer does not automatically recognise ‘Home Responsibilities Protection’, which is a credit given when people are caring for children or the severely disabled. This means that you may be invited to make a voluntary National Insurance contribution to increase your ‘qualifying years’ when in fact it is not actually required in order to achieve a full record. Again, therefore, it is advisable to ask for details of any years to which home responsibilities protection may apply, as once voluntary payments have been made it is unlikely to be possible to claim a refund, even when the payment is later found to have been unnecessary.
Where individuals have been earning at the “Lower Earnings Level”, which means that they did not earn enough to pay a National Insurance contribution, but where they were nevertheless entitled to a credit, again, this may not be taken into account in the calculations of benefit entitlement if the correct paperwork was not completed by the employer at the time, because no payment was due.
The advice, therefore, because of all of the above issues, is to ask the DWP for a schedule of all years where there is no record of contributions or where the record is deficient, whenever a pension forecast is requested.
