You may be able to increase your State Pension entitlement by claiming National Insurance (NI) credits at certain times in your life.
These credits enable you to maintain your NI record when you’re not in paid employment. For example, you could claim credits or receive these automatically if you’re unable to work because of an illness, or you’re looking after children or grandchildren aged under 12 (and plenty of other scenarios which you can find out about below).
It’s important to make sure you receive any credits you’re entitled to, as your State Pension is based on the number of years you’ve paid NI for or received NI credits. Read more in our article How the State Pension works.
Here, we explain how National Insurance credits work, and when you can claim them.
If you’re thinking about getting professional financial advice, you can find a local financial adviser on VouchedFor or Unbiased.
Alternatively, if you’d like advice on your private pension, we’ve partnered with independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Please note that Fidelius can discuss private pensions, but is not able to advise on the State Pension and defined benefit / final salary (e.g. NHS) pensions.
How do National Insurance credits work?
NI credits enable you to build up the number of ‘qualifying years’ you have, which count towards your State Pension entitlement.
In the 2023/24 tax year, the State Pension is £203.85 a week, but you’ll only qualify for this full amount if you have 35 ‘qualifying years’ of National Insurance Contributions (NICs). You must have at least 10 years’ worth of qualifying years to receive any State Pension at all.
For every year you work and earn above a minimum amount (£123 a week in the 2023/24 tax year) you’ll receive a qualifying year. You’ll also receive one if you’re paying voluntary contributions or receiving NI credits.
The two types of credits are Class 3 credits, which count towards your State Pension entitlement and bereavement benefits, and Class 1 credits, which also cover other benefits such as Jobseeker’s Allowance. The type you can claim depends on your personal circumstances. Some are credited automatically, while others will need to actively claim NI credits in certain scenarios.
How much are National Insurance credits worth?
Depending on your individual circumstances, National Insurance credits can potentially increase your State Pension by thousands of pounds in retirement. A year’s worth of NI credits amounts to a 35th of your full State Pension, or £5.82 a week, £302 a year, or around £6,057 over 20 years in retirement. If you haven’t claimed, you can backdate claims for some NI credits (such as Specified Adult Childcare credits for caring for children) as far back as the 2011/12 tax year, as this is when the scheme was introduced.
If you’re thinking about getting professional financial advice, you can find a local financial adviser on VouchedFor or Unbiased, or for more information check out our guide on How to find the right financial adviser for you.
Alternatively, if you’d like advice on your private pension, we’ve partnered with independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor.
Fidelius are rated 4.7 out of 5 from over 1,250 reviews on VouchedFor, the review site for financial advisors. With your free consultation, there’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Please note that Fidelius can discuss private pensions, but is not able to advise on the State Pension and defined benefit / final salary (e.g. NHS) pensions.
When can you claim National Insurance credits?
You can claim NI credits in a wide variety of situations, and you can check your eligibility for credits here. Many people will automatically receive credits they’re entitled to if they’re claiming certain benefits, which we detail below.
You may be able to claim NI credits in the following scenarios:
You’re a parent looking after children aged under 12. You should automatically receive National Insurance credits when you claim Child Benefit. You shouldn’t need to complete any forms, but if you’re missing credits from your record you can apply for these here.
You’re a grandparent helping to take care of children aged under 12. You can also make use of the credit scheme if you’re a grandparent, aunt, uncle, sibling, cousin and parent who doesn’t live with the child (including partners of relatives). These credits are called Specified Adult Childcare Credits.
You don’t need to have looked after a child for a particular number of hours to be eligible to claim credits. For example, you could look after them all week, or just one day a week, and potentially benefit from the scheme. If you cared for a grandchild or grandchildren over video or even the telephone during coronavirus lockdowns, when government rules meant you were unable to do so in person, you can still apply for credits. However, this rule only applies to the tax years 2019/20 and 2020/21. Read more about in our article Caring for grandchildren: how it can help you boost your State Pension entitlement.
Parents who are returning to work can transfer their entitlement to these NI credits to a family member who helps with childcare and who might have gaps in their own National Insurance record. However, parents only receive NI credits if they are registered to receive Child Benefit, which they are entitled to receive if they earn less than £50,000 a year.
You’re a carer for someone who is ill, disabled or elderly. You can usually claim NI credits if you’re providing care for at least 20 hours a week. This is called Carer’s Credit, which can safeguard your State Pension entitlement. If you receive Carer’s Allowance, you’ll automatically receive Class 1 NI credits, while those on Income Support will qualify for Class 3 credits (and benefits). If you’re not on Income Support, and providing at least 20 hours of care a week to someone who’s ill or disabled, you might qualify for Class 3 credits, but you’ll need to claim them. You can read more about how Carer’s Allowance works in our article What is Carer’s Allowance and who gets it?
You’re unable to work because of illness or disability. You may worry about the impact on your NI contribution record if you’re off work for a long period of time. You should receive Class 1 NI credits automatically if you’re receiving one of the following benefits: Incapacity Benefit or Employment and Support Allowance. If you’re not receiving these benefits, but meet certain criteria, you may still be able to claim NI credits, and you can check if you qualify at your local Jobcentre. You may find you’re also eligible for other financial support.
If you’re receiving Statutory Sick Pay but you’re not earning enough to receive a qualifying year on your NI record, you may be able to claim Class 1 credits. You can find out more information and if you can claim these by writing to HMRC at PT Operations North East England, HM Revenue and Customs, BX9 1AN.
You’re unemployed. If you’re receiving Universal Credit you’ll automatically receive Class 3 National Insurance credits. If you receive Jobseeker’s Allowance you’ll automatically receive Class 1 credits. If you’re looking for work but not in receipt of benefits you might still be able to claim NI credits through your local Jobcentre. If you’re sent on a government-approved training course by your Jobcentre that runs for at least a year, you should receive Class 1 NI credits automatically.
You are or have been on Jury service. You can claim National Insurance credits by completing the relevant form above to ensure your State Pension entitlement if you’re off work on Jury service for a lengthy period. You’ll need to apply in writing for NI credits in this scenario by writing to: PT Operations North East England, HM Revenue and Customs, BX9 1AN.
You’re married or a civil partner to someone who works in the armed forces. If you moved abroad with your partner for their work in the armed forces, you can claim Class 3 NI credits for the period you live overseas. You won’t receive credits automatically, so you’ll need to apply to HMRC to ensure these are applied to your record.
You are, or have been, on maternity or paternity leave, or adoption pay. You can claim NI credits if you are receiving or have received.
How can you claim National Insurance credits?
Before claiming NI credits, it’s sensible to work out exactly where you stand and check if you have any missing years in your NI record, which will show you any incomplete years since 2006. If you have gaps where you should have received credits, get in touch with HMRC. You can contact HMRC here for more information on how to make a claim.
If you’re a parent or carer, you should fill in form CF411A to apply for NI credits if you don’t receive this automatically. If you’re a grandparent or other relative caring for children, the parent of the child will need to sign the document too to confirm you’re caring for their child during a certain period, and that they agree for you to receive credits. You can only claim for one credit per household, so if you care for two children in the same household you can only claim once.
Self-employment and National Insurance credits
If you’re self-employed or you have been in the past and your annual profit is, or was, between £6,725 and £12,570 a year, you should automatically receive NI credits towards the State Pension. However, if you earn less than £6,725 you don’t receive any credits, so you may want to consider paying voluntary contributions to top up your record. Read more about voluntary contributions in our article Is it worth paying to top up my State Pension? You may be able to save money by paying voluntary Class 2 contributions (currently £179.40 per year) rather than Class 3 contributions (£907.40 per year).
Remember…
Many people forget that you don’t get your State Pension automatically – you have to actively claim it. You’ll usually be sent a letter a couple of months before you reach State Pension age which will tell you what to do. If you haven’t received a letter for some reason, or if you have misplaced it, you can also claim your State Pension online or over the phone. And bear in mind you can still claim your pension (or choose to defer it), even if you want to continue working.
If you’re thinking about getting professional financial advice, you can find a local financial adviser on VouchedFor or Unbiased.
Alternatively, if you’d like advice on your private pension, we’ve partnered with independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Fidelius are rated 4.7 out of 5 from over 1,250 reviews on VouchedFor, the review site for financial advisors.
Please note that Fidelius can discuss private pensions, but is not able to advise on the State Pension and defined benefit / final salary (e.g. NHS) pensions.
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