With only three months remaining to fill gaps in their National Insurance records, thousands of State Pension claimants are urged to act quickly to maximize their retirement income. The government has extended the deadline for voluntary NI contributions, but time is running out. Eligible individuals can boost their New State Pension by contributing to missing years, but it is crucial to assess if these contributions are necessary.
Thousands of State Pension claimants are at risk of missing out on a vital income boost if they don't act as soon as possible. HM Revenue and Customs (HMRC) has highlighted that there are three months remaining to fill any gaps in their National Insurance (NI) records dating back to 2006, people are urged to maximise their State Pension for retirement. Voluntary contributions can generally only be made for the previous six tax years.
After this year's April 5 deadline, the usual six-tax year limit will apply. In 2023, the previous government extended the deadline for voluntary NI contributions to April 5, 2025, for those affected by new State Pension transitional arrangements, covering tax years from April 6, 2006, to April 5, 2018. This extension has provided more time for people to consider their options and make their contributions. Men born after April 6, 1951, and women born after April 6, 1953, are eligible to make voluntary NI contributions to boost their New State Pension. Some individuals may be entitled to NI credits instead of having to pay contributions, so they need to check and consider what is best for them. HMRC stated that further analysis of the online service usage shows that the majority (51%) of customers topped up one year of their NI record, with the average online payment being £1,193. reports the Daily Record. Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, the online investment platform, explained: 'People typically need at least 10 qualifying years of NI (national insurance) contributions to receive any state pension at all and at least 35 years to receive the full new State Pension - though they don't need to be consecutive years.' She emphasised the importance of weighing up whether you need to fill any gaps in your contribution history: 'Plugging gaps can be quite an expensive process, so it is important to assess whether you actually need to buy back any missing years. This will depend on how many more years you plan to work, and whether you are eligible for NI tax credits, which fill the gaps, such as those who have been sick, were unemployed or took time out to raise a family or care for elderly relations.' Haine pointed out the ease of addressing shortfalls: 'Plugging gaps in your record is relatively straightforward since the Government rolled out its new NI payments services in April last year - a State Pension forecast tool that has been checked by 3.7m since its launch.' She added that individuals simply need to access their personal tax account or the HMRC app to identify and potentially rectify any gaps through the Government's digital platforms. 'A short survey assesses the person's suitability to pay online with those eligible to pay directly given a series of options to plug any gaps depending on when someone wants to stop working.' 'Calculating whether to top up can be confusing though and ultimately there is no point paying for more years than you need because you won't get that money back.' Ms Haine stated. She further added: 'People who might need to top up include those that took a career break as well as low earners or expatriates living and working abroad.' 'Remember, this deadline has been extended a couple of times in the past, which makes it more likely the Government will stick to the April cut-off point this time around. For this reason, those that think they might need to take action should start the process now.
STATE PENSION NATIONAL INSURANCE CONTRIBUTIONS DEADLINE RETIREMENT INCOME
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