For men born after 5 April 1951 and women born after 5 April 1953, there is still a narrow timeframe to potentially boost State Pension entitlement by way of voluntary National Insurance (NI) contributions. There is currently an extended window, which allows eligible people to go back up to 16 years. This had been due to come to an end on 5 April 2023, but due to reports that people had been struggling to access information via government helplines, it was confirmed that this would be extended until 31 July 2023.
Key Facts
- To obtain the full state pension, a NI record must contain 35 qualifying years.
- Gaps in an individual’s NI record can be filled by way of voluntary payments.
- Men born after 5 April 1951 and women born after 5 April 1953 have until 31 July 2023 to pay for any eligible gaps between the tax years April 2006 and April 2016.
- After 31 July 2023, this will revert to the usual 6-year period.
Actions
Eligible people should check their NI contribution status to identify any gaps of missed ‘qualifying years’ in their record. This information is easy to access via the Government Gateway which provides an individual’s NI record and information if any additional NI credits are required to receive the full entitlement.
If the individual already has a full entitlement of 35 years, or is on track to meet this, no further action is likely to be required. Where a shortfall is predicted, it may be worth considering topping up your NI record by way of voluntary contributions, where affordability allows. The cost of doing this is up to £3.15 per week for class 2 contributions (£163.80 pa) or up to £15.85 per week for class 3 contributions (£824.20 pa).
Further points
Where the minimum earnings threshold for NI is not reached in a year, it may be that NI credits are available. There are a number of circumstances in which NI credits can be obtained, including for periods of maternity leave, parents that are registered for Child Benefit for a child under 12, and those on Carer’s Allowance. The full list of allowances for NI credits can be found here https://www.gov.uk/national-insurance-credits/eligibility.
It is worth noting that grandparents or other family members might be entitled to receive NI credits for caring for a child under 12 while their parent (or main carer) is working. Retrospective claims for ‘Specified Adult Childcare credits’ can be made back to 2011 via the CA9176 form
Summary
Where a person is unlikely to meet the full 35 years of NI contributions needed to obtain a full state pension, making voluntary contributions is likely to be beneficial. Depending on the age of the individual and their plans for continuing work/retiring, it may be worth investigating any gaps and considering whether a lump sum voluntary contribution would in fact be beneficial. In any event, checking your record can highlight gaps in your NI record for which a credit should have applied. Where an error has been made or a year has been missed, it may be possible to apply for a credit for the missed year(s).
We would always recommend people regularly obtain their State Pension forecast and National Insurance record to ensure they are on track for a full State Pension. Notwithstanding the topic of this email, it isn’t always the right thing to pay voluntary National Insurance contributions. Therefore, we recommend contacting the Future Pension Centre Helpline on 0800 731 0175, who can assist you in this matter.