Clearer information is needed to help those considering paying voluntary national insurance contributions as many struggle to determine whether making a payment is worthwhile it has been claimed.
Voluntary NICs are commonly used by individuals seeking to fill gaps in their contribution record to protect or increase entitlement to the state pension and other benefits.
Responding to an HMRC call for evidence, the Association of Taxation Technicians said these provide a fair and proportionate way for people with genuine gaps to protect their state pension entitlement. However, it believes the current system could do more to help individuals make informed decisions.
It highlighted concerns that people can find it difficult to establish whether paying voluntary contributions will actually increase their entitlement, whether credits are already available to them for certain years, or whether they have time to accumulate sufficient qualifying years before retirement.
Jon Stride, chair of the ATT’s Technical Steering Group, said: “The decision is not always straight forward. People need clear, accessible information so they can understand whether making a payment will benefit them and whether there may be alternative options available.
“Greater personalisation and clearer explanations would help taxpayers make informed decisions and provide reassurance that they are taking the right course of action.”
The ATT said individuals and their agents should be able to establish easily whether a voluntary payment is advisable, whether it is likely to increase pension entitlement and whether national insurance credits or other alternatives may be available.
