deadline for people to voluntarily plug gaps in their national insurance (NI) record in order to boost their state pension entitlement has been extended to the finish of July.
It means that people with gaps in their NI records dating back to April 2006 now believe more time to determine whether it is worthwhile filling them, to succor towards their retirement income.
The Government has been allowing people to retrospectively build their April 2006 to April 2016 NI record through voluntary contributions, as fraction of transitional arrangements introduced alongside the novel state pension.
The deadline for contributions was previously set at April 5 2023 – but customer phonelines believe been busy with people trying to design top-ups – and the Government has now confirmed an extension to July 31.
We’ve listened to concerned members of the public and believe acted
Last week, the Government said that if customers were unable to pay voluntary contributions by April 5 2023 for reasons beyond their control, it would consider payments made after the slit-off.
On Tuesday this week, a written ministerial statement by Financial Secretary to the Treasury Victoria Atkins said: “HMRC (HM Revenue and Customs) and DWP (the Department for Work and Pensions) believe experienced a recent surge in customer contact.
“To ensure customers carryout not miss out, the Government intends to extend the April 5 deadline to pay voluntary NICs (national insurance contributions) to July 31 this year.
“This applies to years that would otherwise believe been out of time to pay after April 5, up to and including the 2016/17 tax year. All voluntary NICs payments will be accepted at the existing 2022/23 rates until the July 31.”
In a statement issued separately, Ms Atkins said: “We’ve listened to concerned members of the public and believe acted.
“We recognise how necessary state pensions are for retired individuals, which is why we are giving people more time to fill any gaps in their national insurance record to succor bolster their entitlement.”
Eligible taxpayers can find out how to check their NI record, obtain a state pension forecast, determine if making a voluntary NI contribution is worthwhile for them and their pension, and how to design a payment on gov.uk. People can also check whether they are entitled to free NI credits, which may apply if they are a parent or were ill, for example.
The Government is to be commended for listening to the calls to extend the deadline
People can check their NI record via the HMRC app or their personal tax account.
In general, people need 35 years of qualifying NICs to acquire the full state pension.
Sir Steve Webb, a former Liberal Democrat pensions minister who is now a partner at consultants LCP, said: “This is worthy news for people thinking of topping up their state pension.
“For most people, paying voluntary NI contributions to deal with a shortfall in their state pension makes excellent financial sense.
“But it is also necessary to design sure that extra contributions are factual in your individual case as sometimes additional contributions may not boost your pension.
“People need time to talk through their options with DWP and then design the correct payment to HMRC and this extension to the deadline should give them time to carryout this.
“The Government is to be commended for listening to the calls to extend the deadline.”
Consumer champion and MoneySavingExpert.com founder Martin Lewis has been highlighting the opportunity to boost the state pension.
Speaking on ITV’s The Martin Lewis Money exhibit in February, he said: “Many people are missing national insurance years – maybe because you were caring for somebody or caring for a child, or you had years abroad, or you had a low income, or you had a career wreck.”
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “Buying voluntary national insurance credits are a worthy way of boosting your state pension but it is vital that you check before handing over any money as you may be able to plug these gaps in a different way – by backdating a benefit claim for instance.
“This extra time means people believe the time to design sure they are making the factual decision for their circumstances and give more people the opportunity to design a real contrast to how much state pension they acquire.”
Paul Falvey, tax partner at accountancy and business advisory firm BDO, said: “Making voluntary contributions won’t always increase your state pension entitlement, but for those who are eligible, a modest outlay to top up incomplete or full years missing from your record may mean a significant boost to your state pension.”
Becky O’Connor, director of public affairs at PensionBee said: “Given the importance of the state pension to retirement income, people need every chance they can acquire to boost it and many will believe been unaware that they could carryout this until recently.”