HMRC state pension warning issued to 800,000 Brits | Personal Finance | Finance
Hundreds of thousands of Brits have been urged to check for any gaps in their National Insurance Contributions (NIC) that could affect the amount of State Pension they receive. HM Revenue & Customs (HMRC) will soon begin writing to up to 800,000 self-employed taxpayers after it identified an issue that may affect those who became self-employed between 2015 and early March 2024.
Individuals who failed to inform HMRC that they became self-employed by completing form CWF1 may not have paid enough Class 2 NICs, even if they registered for self-assessment, which could have a dramatic impact on the amount of state pension they receive. Up to 800,000 taxpayers may have been affected, including around 160,000 people who are at or near state pension age. HMRC said it will write to those potentially affected, starting with people at or within two years of State Pension age.
Those letters will be sent by summer 2027.
HMRC also plans to upgrade its ‘check your state pension forecast’ tool so taxpayers can identify any NIC gaps and make voluntary contributions. Voluntary contributions can usually be backdated by only six years, but the Government department said those affected by this issue will be able to make payments as far back as 2015/16.
According to MoneySavingExpert, HMRC has urged people not to contact the tax authority about the issue or attempt to complete the CWF1 form retrospectively, as it “could disrupt” the process of fixing it.
For those who have become self-employed since 2024/25, HMRC said it has already corrected the problem.
Self-employed workers build the UK State Pension through NIC paid via Self Assessment, requiring 35 qualifying years for the full amount of £241.30 per week and at least 10 years to receive anything. If your profits reach or exceed £7,105 per year, you receive a zero-cost Class 2 NI qualifying year automatically without paying anything.
If your profits are low or you incur a loss, you do not automatically build up pension years. You can choose to pay voluntary Class 2 contributions (costing £3.65 a week for 2026/27) to protect your record.
The State Pension age is currently 66, but is set to rise incrementally to 67 between May 2026 and April 2028, applying to anyone born between April 6, 1960 and April 5, 1977. Current legislation plans a further increase from 67 to 68 between 2044 and 2046, however, this is still subject to Government review.
