In my Blog ‘Millions of workers have inadequate pension provisions’ posted June 18th, 2026, I bemoaned the fact that the vast majority of the UK’s 4.5 million self-employed (SE), are currently making inadequate or no contributions into a private pension scheme for their retirement.
Not only are the SE workforce not paying remotely enough for their private pensions, significant numbers of them are also missing several of the 35 qualifying years needed to qualify for a full UK state pension (currently £241 per week) with a minimum of ten years needed to get any state pension at all. This, however, is in the process of being at least partly addressed and from a surprising direction, namely HMRC.
Historical background
Class 2 NICs were introduced to provide the SE with access to certain state benefits and allow them to accrue qualifying years for the state pension. The new state pension commenced on 6th April 2016 and is paid to those who reach state pension age after that date, but to receive the full new state pension, most individuals need 35 qualifying years.
The collection of Class 2 NIC has changed many times over the years since it was introduced. Initially, only employees paid it, with the SE having to buy stamps from the Post Office and sticking them on a card. The card was proof of entitlement to benefits. This changed in 1975, when NIC became earnings-based for employees, but for the SE, Class 2 NIC has remained as a flat rate amount.
Before April 2015, Class 2 NIC was collected either by an annual payment by cheque or a quarterly standing order. Then in April 2015, it was collected via a self-assessment tax return when profits were above the SPT (small profits threshold), which for the 2026/27 tax year, is £7,105. If profits are below the SPT, you could lose entitlement for a pension qualifying year, but can still qualify by paying voluntary Class 2 NIC, as long as the money is received by the 31st January payment deadline.
HMRC’s Class 2 NIC campaign
HMRC recently announced that it is encouraging any self-employed individuals who believe they may have been affected, to firstly check their recorded number of qualifying years on their national insurance record. If there are gaps in that record, HMRC is giving those individuals the opportunity to pay for these missing Class 2 contributions on a voluntary basis.
HMRC has now started write to those SE individuals whose records show as being self-employed and who have missing qualifying years between April 2015 to April 2024. The gaps may have occurred for a variety of reasons (see below) but regretfully they’ve done nothing with regard to missing years prior to 2015.
Why are there missing years
The three main reasons why this could have happened:
- As HMRC’s tax systems and national insurance records were not fully linked, the completion of the sole trade or partnership pages in a tax return without completing a CWF1 meant that the national insurance office was not aware that the individual needed to pay Class 2 NIC.
- An individual started self-employment but did not complete a CWF1 form to register as SE, usually because they already had a taxpayer reference UTR or completed a tax return for another reason.
- If a person correctly registered for Class 2 NIC, but the payment for voluntary Class 2 NIC was received after the 31st January deadline, it did not count, with any such payments left on the individual’s self-assessment account as a credit or refunded with any other repayment due.
What have HMRC said
HMRC have estimated that up to one million SE taxpayers may have gaps in their record due to this issue, with nearly 20% of them within two years of state pension age. HMRC say that they’ve written to all of the affected individuals they’ve thusfar identified, but the letter does not include a demand for payment. They have however said in the letter that the recipient will be allowed to make voluntary contributions.
Normally, voluntary NIC can only be paid for the previous six tax years, but HMRC, in a rare show of generosity have stated that they will relax this restriction for those affected, allowing gaps dating back to April 2015.
Myrtle Lloyd, HMRC’s chief customer officer, said that the individuals nearest state pension age will receive their letters first, with others receiving theirs over the coming months. She added that taxpayers do not necessarily need to wait for a letter from HMRC before reviewing their NI record and state pension forecast, saying “There is no need for people to do anything now. We have identified those affected and are contacting them to reassure that processes have been set up to remedy the situation now and for the future. We want to make sure no one misses out on their state pension entitlements.”
What can those affected do
If you receive a letter from HMRC, your first step should be to check whether the additional qualifying years are actually required. It may be that you already have the 35 years needed for a full state pension, perhaps due to a previous spell of self-employment or because you’ve been in PAYE in the past. Although HMRC may be inviting you to make a voluntary payment, if your check shows that you already have 35 qualifying years, any additional payments will not increase your state pension amount.
The easiest and quickest way to check qualifying years is through your personal tax account (PTA). You then follow the link ‘National Insurance and State Pension’. This will take you to an estimate of your state pension based on current rates and qualifying years. A further link will take you to a year-by-year breakdown of your NIC payment history.
Alternatively, form BR19 can be downloaded, completed and posted to the Newcastle Pension Centre, or you can apply online by visiting: https://www.gov.uk/government/publications/application-for-a-state-pension-statement If however you do not have a computer, you can call the Department for Work and Pensions Future Pension Service on 0800 731 0175.
Is it value for money?
In the current tax year, the contribution needed to be eligible for a qualifying year is £3.65 a week, or £189.90 for a full year. Whilst HMRC have yet to confirm this, it is probable that buying back earlier years will also cost you £189.90 for each and every year.
So, is it worth it? Most definitely it is, especially when you consider For the 2026/27 tax year, the full rate of the new UK State Pension is £241.30 per week and this is projected to rise to £253.68 next year. So, if you say claimed the state pension, based on the current rate of inflation projected forward for 10 years, you will receive approximately £3,750 additional pension for your initial £189.90 outlay.
Accountant’s view
Based on the average life expectancy in the UK, most people will live to approximately 80 years of age, it is therefore just basic commonsense to grasp this opportunity to buy back any years missing from your National Insurance pension pot.
