Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether her Department has assessed the potential merits of (a) introducing National Insurance credits for periods spent in full-time higher education and (b) allowing individuals to make voluntary National Insurance contributions for student-year gaps that fall outside the standard six-year window.

Qualifying years of National Insurance on an individual’s NI record can be built in several ways; by paying National Insurance contributions (NICs) while working (employed or self-employed); by being credited with NI credits; or by paying voluntary NICs.

Individuals can usually pay voluntary NICs for the past six years. This time limit has been in place for over forty years and is a vital part of the National Insurance system. It is in place to prevent individuals from deferring payment until just before they are due to retire and effectively buying an enhanced pension, or a pension from scratch, which would be unfair to the majority who contribute throughout their lives.

In line with legislation, HMRC can only extend the time limit if an individual exercised due care and diligence but due to factors not in their control, they were unable to pay. If they believe exceptional circumstances stopped them from paying, they can ask us to extend the usual six-year deadline.

NI credits recognise the non-financial contributions that individuals make to society and/or the economy. There are no National Insurance credits available to protect a person’s future State Pension entitlement as a result of them being in higher or advanced education.

Most individuals under the age of 50 will only need 35 qualifying years over a possible working life of 50 years to get the full rate of the new State Pension. This flexibility allows individuals to take time out of the workplace, including gap years, without harming their State Pension position.