Having gaps in your national insurance record could affect the amount of state pension you get. If you are aged between 45-70, the Government has announced this week that you now have until 5 April 2025 to fill in any gaps you might have in your record which go back to 2006.
The new state pension is based on your national insurance record when you reach state pension age. You will need 10 years’ worth of qualifying contributions to get any state pension but in order to receive the new full state pension, you will need 35 years’ worth of qualifying contributions. The full new state pension is currently £203.85 per week.
If you have gaps in your national insurance record and are worried this will result in a smaller state pension, it is worth considering buying national insurance years.
Typically, you can make voluntary national insurance contributions (NICs) for the previous six years but if you are aged 45 to 70, you can go back as far as 2006. Following the Government’s deadline extension, you now have until 5 April 2025 to buy back any missing national insurance years from 2006 to 2016.
Where do you stand?
- Check your national insurance record
Worried you have shortfalls in qualifying years’ worth of contributions? Use this link to check your national insurance record.
- Check your state pension entitlement
Wondering how much state pension you are currently entitled to? Use this link to check. This will show you how much state pension you could get, when you can get it and how to increase your entitlement.
If your forecast does not show the full £203.85 a week and you have gaps since 2006, you might be able to contribute to these years in order to receive the full amount.
However, if you are forecast to get the full £203.85 a week, further NI contributions will not increase your state pension entitlement.
Fill national insurance gaps
- With free national insurance credits
If you were not working in years since 2006, you may have been eligible to receive NI Credits. Use this link to see if you are eligible for any national insurance credits.
- With voluntary national insurance contributions
If you have gaps in your NI record which are not covered by NI credits, you can make voluntary contributions. Currently, voluntary NICs (Class 3 NICs) cost £17.45 per week.
Warnings
If you were 'contracted out' of the additional state pension before 2016, topping up may not help.
Do not pay until you have called the Government's pension helplines or had a discussion with your adviser to weigh up if it is worth it for you.
Conclusion
If you envision yourself not paying much more national insurance, your state pension forecast shows a shortfall and you have NI gaps between 2006 – 2016, it would seem sensible to consider topping these gaps up.
If you have any concerns or questions with regards to the above, please do not hesitate to get in touch with Andy Hogarth, Associate Partner, Hazlewoods Financial Planning.