Upcoming deadline: 5 April 2025
If you want to top-up your state pension, consider the following…
The deadline for buying back missing years was originally April 2023, but this has been put back to April 2025.
A ‘missing year’ is a period where someone doesn’t have enough National Insurance Contributions (NICs) to qualify for a full State Pension.
If you’re thinking of buying back any missing years before the 5 April 2025 deadline, we strongly advise you act (or at least check you record and forecast) now.
Under normal circumstances, you can only buy back missing years over the previous 6 financial years. However, until 5 April 2025, you can also buy back any missing years from 2006 to 2016.
For some, this could make a significant difference to the amount of State Pension they will receive.
Key details
The full ‘new’ State Pension is currently £221.20 a week, increasing to £230.25 a week from the 6April 2025.
The amount you receive is dependent on how many ‘qualifying’ years you have on your National Insurance (NI) record.
You need a minimum of 10 qualifying years of NICs to be entitled to any State Pension.
Generally, for an individual to receive their full state pension entitlement, under current legislation, 35 qualifying years of NICs must be paid and/or credited.
If you have not already done so, you may wish to complete a state pension forecast. The forecast will confirm your current entitlement based on your NI to date, and most importantly will identify any gaps in your records. From this you can ascertain whether any action can be taken to improve your pension position. If you cannot use the online service to get a State Pension forecast, you can do it by post using this application form.
You will need your Personal Tax Account login details (Government Gateway ID and password).
This forecasting tool will assume that you will work until you hit pension age; this might not be the case. You may wish to retire early or live abroad. Consider this, even if you’re currently on course to receive the full amount.
You may have gaps in your NI record, if you were on low income, took a break from your job, spent time abroad, or have not been claiming NI credits.
Considerations
Paying missing NICs may not be the best option for everyone, so if you’re thinking of filling NI gaps, be sure it will suit your finances.
If you’re near State Pension age, it will be simpler to work out if paying missing years will be worthwhile. If you’re set to receive less than £221.20 a week and you won’t be able to fill any gaps by other means (National Insurance Credits), you’ll probably wish to buy those missing years before 5 April, as you may not have many years left to reach the requisite 35 years.
It’s worth remembering that even after the 5 April deadline, you will continue be able to fill the previous 6 years’ gaps and these may be sufficient to ensure you receive the full amount.
If you’re older than 40 but a way off State Pension age, you might reach your qualifying contributions naturally.
The younger you are the more opportunity you have. If you’re under 40, there’s even less urgency, but you may which to check if it’s currently financially convenient for you to fill potential gaps.
Note…
There is concern that this deadline will congest phonelines. Consequently, anyone who fails to make contact with the Department of Work and Pensions before the 5 April deadline can fill out a call-back request form. Those who submit a call-back request should still be able to pay voluntary NICs to 2006, after the deadline has passed. It’s advisable to take a screenshot of the request, prior and post submission (including a time reference) so you have supporting evidence. You should receive a return call within 8 weeks, if you do not you would be advised to follow the matter up.
Need some guidance?
There are a variety of different circumstances that might affect your pension contributions, such as NI credits, whether you were ‘contracted out,’ or if you were self-employed. Consequently, there may be complications in this process. You can contact the Future Pension Centre, if you require further information or guidance.
If you are unsure whether filling any NIC gaps will be beneficial to you, or need assistance with buying missing years, please get in touch with us and a member of our team will be able to help you.
