Mike Ambery, Retirement Savings Director at Standard Life, part of Phoenix Group said: “In 2023 the deadline to backdate National Insurance (NI) contributions to boost your state pension was extended to this April following a huge surge in interest. The time’s almost up and after the deadline, you’ll only be able to plug gaps from 2019 onwards, so there could be 13 years that you will lose the ability to buy back. The background to this is quite complex but began on April 6, 2016, when the Government introduced the new state pension – anyone who reached the pension age since then has been put on the new state pension. Under normal rules, you can only fill gaps in your NI record from the last six years. However, if you reached state pension age or will reach it after 6 April 2016, you currently have the chance to plug gaps in your NI record going back to 2006. This could make a real difference – as a general guide, buying 13 years of NI contributions costs around £10,715 but could gain you over £74,700 through a 20 year retirement.* The amount you gain will depend on how long after state pension age you live, alongside other factors like any tax you pay after factoring in other sources of income.
“Despite the potential benefits, buying backdated voluntary contributions won’t be right for everyone. It’s very important to consider your own situation, as there could be many reasons why voluntary NI contributions wouldn’t suit your circumstances, for example if you have sufficient time to make up the years without making voluntary contributions. There’s not a lot of time left, and this is a big decision to make. Checking your record and contacting the relevant people before 5th April could potentially mean you’re thousands of pounds better off in future. While the deadline remains in place, there has been some welcome flexibility - those who secure a callback from HMRC before the deadline may still be able to make payments after April 5. That said, acting as soon as possible remains crucial to avoid missing out.”
What to do next
You can find out how to check your National Insurance record, obtain a State Pension forecast, decide if making a voluntary National Insurance contribution is worthwhile for them and their pension, and how to make a payment on GOV.UK.
You can also check your National Insurance record through your Personal Tax Account.
* How to buy voluntary national insurance contributions
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