26 March 2009 - Publication of DWP working paper 61: Investigation of the gaps in individuals’ National Insurance records

Today, the Department for Work and Pensions published new, detailed research investigating the characteristics of individuals who have the largest gaps in their National Insurance (NI) records to date and are due to reach State Pension Age (SPA) around either 2010 or 2025.

The report presents findings from a telephone survey which was commissioned to better understand what individuals were doing during the gaps in their NI accrual records.   For this survey, a ‘gap’ in an individual’s NI accruals record was defined as any period of time when an individual does not have (sufficient) NI credits or payments to generate a qualifying year for the Basic State Pension (BSP).

The main findings are:

• DWP projections have previously shown that around 75 per cent of women and over 90 per cent of men reaching SPA in 2010 will have a full BSP, increasing to over 90 per cent of both men and women reaching SPA in 2025.
• This new research did not involve any forecasting – it only looked at individuals’ accrual records to date.  Individuals were included in the research if they had accrued qualifying years for less than 60 per cent of their working lives to date ¹. It showed that, of those who have these ‘gaps’ in their records to date and are due to reach SPA around 2010, the majority are women (83 per cent women versus 17 per cent men).
• In contrast, men make up the majority of individuals due to reach SPA around 2025 with these ‘gaps’ in accrual to date (59 per cent men versus 41 per cent women).  It is important to note that the 2025 cohort have many more years until they reach SPA and this future could have a significant impact on whether or not these individuals reach SPA without a full BSP.
• Country of birth is an important characteristic in investigating the group of individuals who have these ‘gaps’ in their NI accrual to date.  Around a fifth of those due to reach SPA around 2010 with these ‘gaps’ in their NI records to date were born outside the UK, whilst around a half of the 2025 cohort were born outside the UK.  Overseas born men and women are much more likely to have significant ‘gaps’ in their records than UK born men and women.
• Individuals were asked to recall what activities they were doing during years where they had a ‘gap’ in their NI records.  The survey did not attempt to collect detailed information on the activities undertaken which could then be directly compared to the NI qualifying conditions. There is no single activity that explains why the majority have ‘gaps’ in their NI accrual.  Respondents often reported doing a combination of activities in any particular year and different activities over their life course, demonstrating that some people have complex lives with complex patterns of accrual and non-accrual – for example, periods of studying, being abroad, being in prison etc.   The most common activities reported were paid work and ‘looking after their children’, though the findings do not tell us whether the reported activity should have led to eligibility for a qualifying year.

At 2004/05 – the latest year’s NI data that was available.  Sixty per cent was used for men and women due to reach SPA around 2025 and for men due to reach SPA around 2010.  For women due to reach SPA around 2010, 68 per cent was used (due to their lower SPA).  These percentages were calculated on the basis of an individual requiring 30 qualifying years for a full BSP over the duration of their working life. 

Notes to Editors

1. This research is published on 26 March 2009 as part of the DWP Working Papers Series as Working Paper 61: Investigation of the Gaps in Individuals’ National Insurance Records
2. The report is available at http://research.dwp.gov.uk/asd/asd5/wp-index.asp
3. The research was carried out on behalf of DWP by the National Centre for Social Research (NatCen).  A telephone survey was conducted with 1205 individuals due to reach SPA around 2010 and 2025 with significant ‘gaps’ in their National Insurance records up to 2004/05 (the latest data available).   Individuals were selected for interview solely based on their past accrual pattern.  The future period up to SPA could have significant impact on individuals’ overall accrual of qualifying years for Basic State Pension (BSP) – particularly for those individuals in the cohort due to reach SPA around 2025. 
4. This research was carried out following an initial feasibility study involving ‘scoping’ interviews and a survey pilot.  Recommendations from the feasibility study informed the development of the main-stage survey.  Analyses of the survey data were conducted in-house by analysts at DWP.  All the above stages of the research are detailed in the publication.
5. It is important to note that the survey was designed to collect information on what the respondent was doing during ‘gaps’ in their NI data.  The survey was not seeking to verify the accuracy of the administrative data.  This was a valid methodology for research purposes, particularly given the complexity of the information the survey was required to collect, but it places limitations on the read across of the findings into policy or administrative issues.  The survey did not attempt to collect detailed information on the activities undertaken which could then be directly compared to the NI qualifying conditions.  There may be some recall errors associated with response to the survey, particularly where we have asked individuals to recall what they were doing over 30 years ago on a year-by-year basis.
6. The findings may be subject to a number of other response biases.  Social desirability response bias may be an issue if respondents have adjusted their answers about what they were doing during ‘gaps’ in their NI records so as to appear ‘socially acceptable’.  The fact that the survey focused solely on collecting data based on ‘gaps’ in individuals’ NI accrual records, irrespective of whether or not the respondent agreed with the administrative data about the number, timing and length of ‘gaps’, might also have resulted in some bias.

 

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