Making Voluntary Contributions to Your State Pension
The government has extended the voluntary National Insurance deadline from 5 April 2023 to 31 July 2023 to give taxpayers more time to fill gaps in their National Insurance record and help increase the amount received in state pension.
Who should consider voluntary contributions?
In general if you reach state pension age on or after 6 April 2016 you need 35 qualifying years to receive a full state pension. If you have less than 35 qualifying years but at least ten qualifying years, you will receive a reduced state pension. Individuals who reached state pension age before 6 April 2016 needed only 30 qualifying years to secure a full state pension.
Anyone with gaps in their National Insurance record from April 2006 onwards now has until 31 July 2023 to decide whether to fill the gaps with voluntary contributions to boost their State Pension. After this, you will only be able to go back six years to fill any gaps.
The decision to top up or not depends on each person’s individual circumstances. For example, someone near to state pension age whose state pension is, or is forecast to be, less than £185.15 a week, and unable to plug gaps by any other means, topping up could be an easy decision. For someone older than 45 but some way off state pension age there may be other ways to fill the gaps. Or, if you are close to the threshold of either paying tax or hitting the 40% tax bracket once your state pension and other income is combined, any gains from buying extra pension years may be reduced.
What to do now
We would recommend that anyone who is not sure of their state pension position should check their individual situation which can be done online or by phone:
- for those not yet state pension age you can
check your state pension forecast here or call the Future Pension Centre on 0800 731 0175
- for those already at state pension age you can
check your national insurance payment history for any gaps here or call the Pension Service on 0800 731 0469.
If you need further guidance about voluntary contributions or your overall retirement income please do get in touch.