Watch out for NI errors!

You may have read recently that up to two million workers a year who faithfully paid their tax bills have not been matched with their NI contributions – another shocking scandal to involve Her Majesty's Revenue and Customs - which is still reeling from last year's crisis that left millions paying the wrong amount in tax.

So what has gone wrong?

Millions of workers who have paid National Insurance have not been awarded the National Insurance credit for that year. As a result, they risk losing part of their state pension.

Every year of missing NI will reduce the basic state pension by £3.25 a week. For instance, if five years are missing this will reduce the pension by £16.25 a week.

You may have read recently that up to two million workers a year who faithfully paid their tax bills have not been matched with their NI contributions – another shocking scandal to involve Her Majesty's Revenue and Customs - which is still reeling from last year's crisis that left millions paying the wrong amount in tax.

So what has gone wrong?

Millions of workers who have paid National Insurance have not been awarded the National Insurance credit for that year. As a result, they risk losing part of their state pension.

Every year of missing NI will reduce the basic state pension by £3.25 a week. For instance, if five years are missing this will reduce the pension by £16.25 a week.

Who is affected?

There are 9.3m individual records that have not been matched up since 2004.

This does not mean there are 9.3m people affected, as some could be two tax records for the same person.

The self-employed are unlikely to be affected as they fill out a self-assessment tax form. Accountants believe that the majority of problems will lie with basic rate taxpayers on PAYE.

How can I check?

Look at the P60 form your employer should give you at the end of each tax year - usually in May. Check the NI number is correct.

This should have two letters, followed by six numbers, and then one letter. If this is okay, then HMRC says you are unlikely to be affected.

What should I do if my NI number is wrong?

Give your employer your correct number. If you have moved jobs, or cannot trace your old employer then get in touch with HMRC. It has a dedicated helpline for NI problems: 0845 302 1479.

How can I check what state pension I am entitled to?

It is possible to check your pension forecast. This shows the number of qualifying years you have built up, and the number of years of NI contributions payments.

Call: 0845 3000 168 or write to: State Pension forecasting team, Future Pension Centre, Tyneview Park, Whitley Road, Newcastle upon Tyne NE98 1BA.




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