Nearly 800,000 self-employed taxpayers could have gaps in their National Insurance records, prompting HMRC to contact those who may be affected.
The issue relates to people who became self-employed between 2015 and March 2024 and could potentially affect their entitlement to the State Pension and other contributory benefits.
National Insurance records are used to determine whether an individual has built up enough qualifying years for the State Pension. Missing contributions can therefore have longer-term financial consequences, particularly for those approaching retirement.
HMRC says anyone who receives a letter, or who checks their online pension forecast and discovers gaps in their record, will be given an opportunity to make additional contributions. Those affected will be able to go further back than the usual six tax years and pay contributions at the original rate.
Gaps may have occurred where Class 2 National Insurance contributions were paid after the 31 January deadline. Problems can also arise where payments made by taxpayers were allocated to outstanding tax liabilities before being applied to National Insurance contributions.
HMRC plans to prioritise those closest to retirement. Around 160,000 letters will be sent to taxpayers who are already above State Pension age or are within two years of reaching it, with these expected to be issued by summer 2027.
Taxpayers who believe they could be affected are being encouraged to check their previous Self Assessment tax returns to confirm whether Class 2 National Insurance contributions were made.
It may also be worth reviewing your National Insurance record and State Pension forecast online. Identifying any missing years early provides an opportunity to understand whether action is required and, where appropriate, make contributions to protect future State Pension entitlement.
For self-employed individuals, particularly those approaching retirement, checking historic National Insurance records now could help prevent an unexpected shortfall later.
