National Insurance contributions

This page is for UK residents who want to know what to do about their National Insurance contributions while they are on their career break.

• Do I have to carry on making National Insurance contributions?
• Can I make voluntary National Insurance contributions?
• Should I make voluntary National Insurance contributions?
• How do I make voluntary National Insurance contributions?
• More information

Do I have to carry on making National Insurance contributions?

If you are not doing paid work in the UK during your career break, you do not have to pay National Insurance contributions. It doesn't matter if you are doing paid work abroad.

If you are on a paid sabbatical, you will still be earning and your NI contributions will continue to come out of your pay packet

If you are on an unpaid sabbatical, your salary will be suspended. Obviously, this means your NI contributions will no longer be automatically deducted, so if you want to carry on making them, you will have to do it voluntarily.

Can I make voluntary National Insurance contributions?

Yes you can. These are called Class 3 National Insurance contributions. If you chose to do this, you must normally pay them within 6 weeks of the end of the tax year (mid-May) in which you're not working. You can also make back-payments up to 6 years later.

Some benefits, including Maternity Allowance (not Statutory Maternity Pay), Incapacity Benefit and Jobseekers Allowance are affected if you have lived abroad. More information can be found on this part of the Department of Work and Pensions site.

Should I make voluntary National Insurance contributions?

It is not usually necessary to make voluntary National Insurance contributions while you are on your career break. However, you may wish to consider doing this if:

• You have not worked in this country for a number of years (eg if you moved here from abroad mid-career, or if you have had long periods of unemployment)
• You are going to be away for a long time (years, not months)

This is more significant for older career breakers, as they have less time before retirement to make up any deficit. If you are over 50, check your contributions carefully when taking your career break.

The government advise you to get a State Pension Forecast before deciding whether or not to pay voluntary National Insurance contributions. You can do this online at www.pensionservice.gov.uk or call 0845 3000 168.

How do I make voluntary National Insurance contributions?

You just send a cheque to HM Revenue and Customs. If you're paying for the current tax year, you can do it by direct debit.

More information

You may want to discuss this with your personnel officer or HR manager. Your personal/private pension arrangements may have an impact on your decision to make voluntary National Insurance contributions. If you have a good private pension, you may feel less dependent on the state pension.

Also consult the following web pages:

• Citizens Advice Bureau
• HM Revenue and Customs pages on voluntary National Insurance contributions
• The Pension Service

With thanks to Gillian, who emailed us asking about National Insurance.

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