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If you intend to claim the UK State Pension, it is worth reviewing your NIC record to ensure that there are no gaps which will prevent you from receiving the full ‘new State Pension’.
Anyone retiring after 6th April 2016 typically needs 35 qualifying years of NICs to receive a full 'new State Pension' (NB this may be higher if your NIC record began before April 2016). Any gaps in your NIC record may mean that you do not receive the full pension.
Normally you can only fill in gaps from the previous six years. However, the Government are currently allowing a temporary extension to this which enables taxpayers to fill in any gaps in their NIC record dating back to April 2006.
The original deadline for doing this was 31st July 2023 but it has been extended by nearly two years, to 5th April 2025, giving you more time to properly consider whether paying voluntary NICs is right for you and means nobody needs to miss out on the possibility of boosting their State Pension entitlements.
Voluntarily top up
To claim any State Pension, you require at least 10 years of qualifying contributions. NICs are generally made by employed and self-employed individuals based on earnings, with eligible individuals also receiving NI credits.
If someone hasn't contributed enough before retirement, it might be wise to voluntarily top up their NICs. Usually, such contributions can only be made for the past six years, but transitional provisions ending in April 2025 permit taxpayers to go back to April 2006. Gaps may arise if, for instance, you worked and paid taxes abroad.
Voluntary contributions made before 5th April 2025 will be subject to the lower 2022/23 rates, rather than those applicable from 2023/24 onwards.
Voluntary contributions can be particularly beneficial for those nearing the State Pension age (currently between 66 and 68, depending on your birth date) who cannot reach the required number of qualifying years during their remaining working years.
Should you take action?
Men born after 5th April 1951 and women born after 5th April 1953 now have until 5th April 2025 to fill in any eligible gaps in their NIC records arising since April 2006. Following this, the standard six-year duration will resume.
Paying voluntary contributions does not always increase your State Pension. Before starting the process, eligible individuals with gaps in their NIC record from April 2006 onwards should check whether they would benefit from filling those gaps.
You can visit the Government website, GOV.UK, to find out how to check your NIC record, obtain a State Pension forecast and decide if making a voluntary National Insurance contribution is worthwhile.
Please note: This content is for general information only and does not constitute advice. The information is aimed at retail clients only.
The content was accurate at the time of writing. Whilst information is considered to be true and correct at the date of publication, changes in circumstances, regulation and legislation after the time of publication may impact on the accuracy of the article.