Your personal National Insurance record and state pension
What qualifies as a National Insurance qualifying year and how to check your record
Maintaining a National Insurance qualifying year protects your state pension entitlement. The optimal director salary is often specifically set to ensure this at minimal cost.
What qualifies as a National Insurance qualifying year
A year qualifies for state pension purposes when your earnings are at or above the Lower Earnings Limit (£6,708 for 2026/27). At this level, no cash National Insurance contributions are paid, but a notional National Insurance credit is recorded. Both recommended director salaries (£6,708 and £12,570) are above the Lower Earnings Limit.
Checking your National Insurance record
Go to the GOV.UK website to see your history, any gap years, and your projected state pension. The full new state pension for 2026/27 is £241.30 per week and requires 35 qualifying years. A gap year can often be filled with voluntary Class 3 NIC contributions, at £956.80 for a full year in 2026/27, which can be worthwhile depending on your record and how close you are to state pension age.
💡 Good to know: A director on zero salary builds no National Insurance qualifying years. A salary at or above the Lower Earnings Limit (£6,708 for 2026/27) costs nothing in National Insurance contributions but preserves the qualifying year. Since April 2025, the employer National Insurance contributions threshold is £5,000, so anything above this triggers employer’s National Insurance contributions at 15% unless covered by the Employment Allowance, which a single-director company cannot claim.
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