Voluntary Contributions to National Insurance

Find out what voluntary contributions entail and if they’re right for you.

13:45 28 March 2013

Voluntary contributions are when you freely give payments to the government even though you may not have worked, or you do not owe the government for some reason.

 

The downfall of not paying anything in taxes is that you have limited, or no state benefits due to lack of payments. This unfortunately means that the basic state pension is also one of the state benefits that you miss out on.

 

One way around this is to start doing voluntary contributions. This will ensure that you will have some, if not all, of your state benefits. Who Should Consider Paying Voluntary National Insurance?

 

There are several types of people who may want to consider paying voluntarily. 

 

• One of the reasons people elect to do so is if they have become unemployed and do not have any other way to make contributions to receive their benefits. 

 

• The second type of individual simply does not earn enough through a salary to make the payments any other way.

 

• Also, if you do not make enough money from a small business to file any Class 2 taxes, it is a good idea to make voluntary contributions or file for exemption. 

 

• This would mean that you have a small earnings certificate issued from the government and you are exempt from having to pay taxes for that year or longer.

 

• If you have moved out of the country and do not work for anyone in the U.K. you may also want to make voluntary payments. 

 

• Lastly, you may choose to make voluntary payments if your spouse passed away, or you cancelled your reduced rate election payments.

 

Some reasons you may be denied paying voluntary contributions are because you chose to pay reduced National Insurance contributions for the whole year. You can’t pay both ways in the same tax year for your insurance. You have to pick one and then change it for the next year if you choose to do so. You may also have National Insurance Credits.

 

The third reason you could be denied is because you have successfully reached the age to get your pension during that tax year. This is good news and means you probably won’t have to pay to get your benefits. Just to be safe you should contact the HM Revenue and Customs office.