Hundreds of thousands of people who became self-employed between 2015 and 2024 may have incorrect gaps in their National Insurance records, potentially affecting the State Pension they receive.
HM Revenue and Customs (HMRC) estimates that up to 800,000 people could be affected. Around 160,000 of them have already reached State Pension age or are expected to reach it within the next two years. HMRC has advised people not to take immediate action, as it plans to contact affected individuals directly.
How did the problem arise?
Between 2015 and 2024, people starting self-employment had to complete two separate steps. They needed to register for Self-Assessment and separately notify HMRC of their self-employed status using form CWF1.
Some individuals registered for Self-Assessment and completed the self-employment section of their tax returns but did not submit the CWF1 form. As this form was needed for Class 2 National Insurance contributions to be assessed and recorded correctly, the missing step may have created gaps in their contribution history.
HMRC has stressed that only a minority of people who registered as self-employed during this period are affected. Its systems were updated from the 2024/25 tax year, so the issue should not continue for people becoming self-employed under the revised process.
Why do National Insurance gaps matter?
A person’s National Insurance record plays an important role in determining their State Pension entitlement. Under the new State Pension system, most people need at least 35 qualifying years to receive the full amount, currently £241.30 per week. The exact number of years required can vary depending on an individual’s contribution history.
For the 2026/27 tax year, self-employed people with profits of at least £7,105 have their Class 2 contributions treated as paid. Those with profits below this level can choose to make voluntary Class 2 contributions at £3.65 per week to protect their record, according to GOV.UK.
A gap will not automatically result in a lower pension. The financial impact depends on the number of qualifying years already recorded and whether correcting the gap would increase the person’s entitlement.
What happens next?
HMRC began issuing letters in July 2026 and will continue contacting people in stages. Those at or within two years of State Pension age should receive correspondence by summer 2027, with letters to other affected individuals expected from spring 2027.
Recipients will be directed to the Department for Work and Pensions, which will assess whether the gaps have affected their State Pension and whether making additional contributions would be worthwhile.
Although voluntary contributions can normally only cover the previous six tax years, HMRC will allow people affected by this issue to correct gaps dating back to 2015 at the original rates.
For now, individuals are advised to wait for official correspondence and not submit form CWF1 retrospectively, as this could interfere with the correction process.
If you receive a letter and need help understanding your National Insurance position, Lanop‘s experienced advisers can help you review your records and consider the appropriate next steps.
