Anyone who is planning to retire soon and claim the UK state pension is being urged to check their national insurance (NI) record before 31 July 2023.
The reason for this is because currently, voluntary state pension contributions can be made in order to fill gaps in pension payments all the way back to April 2006, this will be curtailed from August 2023 however which may affect anyone planning to retire in the near future.
Qualifying for the new state pension
National insurance (NI) contributions are made by employed and self-employed individuals based on their earnings. To qualify for the maximum ‘new state pension,’ (received by those retiring on or after 6 April 2016), a person must have 35 qualifying years of NI contributions.
For part payment of the ‘new state pension,’ a person must have contributed for at least 10 years.
For those whose NI record started before 6 April 2016, different rules may apply. In this case, the number of required years of NI contributions/credits to obtain the full state pension may be higher.
If someone hasn’t contributed enough before reaching state pension age, they may not be able to claim state pension, or receive the full state pension amount.
To help protect state pension and other benefits, it may be beneficial for people to make voluntary NI contributions to top up their contribution history, potentially increasing the amount of state pension they will receive.
We do recommend that you take financial advice if you decide to do this because amongst other factors, it requires predicting what contributions will be made before state retirement.
Normally, it’s only possible to make voluntary contributions for the past six tax years. Currently there is an extension in place. Individuals can fill gaps in their NIC history from 6 April 2006 to the present date by making voluntary contributions.
From August 2023, the timeframe for making voluntary contributions will revert to the normal six years.
Please head to the Gov website to check your National Insurance contributions.
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