Pension Top-up Deadline looming

Under normal rules, it’s possible to fill gaps in your National Insurance (NI) record up to six years after the year in question. Beyond that point, the year becomes a permanent gap in your payment record and can adversely affect the amount of state pension for which you’ll qualify.

However, until 5th April 2023, you can go further back to fill gaps for an extra 10 years, allowing you to go back to 2006/07.

As a result of concerns raised by taxpayers who were struggling to reach HMRC, this deadline has now been extended to 31st July 2023.

Where the rates of voluntary National Insurance contributions were due to go to up from 6th April 2023, payments made by 31st July 2023 will be paid at the lower rate.

This applies only to those who reached, or will reach, state pension age after 5th April 2016.

Anyone thinking of topping up their state pension for these earlier years must check with the Future Pension Centre at DWP before making such contributions. This is because there are some situations in which paying historic contributions would not boost your state pension. 

In some cases, buying back missing years can extremely valuable.

A pensions expert has said ‘The current cost of voluntary Class 3 NI contributions is £15.85 per week or £824.20 per year. This one-off lump sum payment can add up to 1/35 of the full rate to your eventual state pension. As the state pension is currently £185.15 per week, this boost is worth £5.29 per week or around £275 per year. Someone who gets this boost for at least four years will recover their initial outlay (net of basic rate tax) and everything beyond that would be profit.’

This could be your last chance to fill any gaps you may have in your contributions that go back to this point, so don’t miss the opportunity!

You may also like to take a look at our related post, Protect your State Pension.

Both of these subjects require you to access your National Insurance record, but sadly this sin’t something we can help you with, even if we’re recognised as your agent with HMRC. You can access the records using your Government Gateway details, but if you’re unsure you can find all the necessary information here.