DEADLINE FOR TOPPING UP NATIONAL INSURANCE CONTRIBUTIONS EXTENDED TO APRIL 2025

13 July 2023

On 12 June HMRC confirmed that the already extended deadline for members of the public to top up their National Insurance credits would be pushed back to 5 April 2025.

Under normal rules, individuals are only able to fill gaps in NI records for the past 6 years, but with the extension of the deadline, they now are able to pay back historic years of NI contributions – going all the way back to 2006/07.

WHY HAS THE DEADLINE BEEN EXTENDED AGAIN?

The Department for Work and Pensions and HMRC have been receiving a high volume of calls and interest which has resulted in reports of long wait times.

Many people have already taken advantage of the scheme and the extension will relieve pressure for those who need more time to consider whether paying voluntary contributions is right for them.

WHAT DOES THIS MEAN FOR YOU?

The new State Pension is worth £203.85 per week (£10,600 per annum) from 6 April 2023 as a result of the ‘triple lock’ being restored.

You need to have racked up at least 35 qualifying years in order to qualify for the full amount, or a minimum of 10 years to receive anything at all.

If you were a man born after 6th April 1951, or a woman born after 6th April 1953, you’ll be eligible for the new State Pension which is £203.85 per week. If you reached the State Pension age before 6 April 2016, you’ll receive the Basic State Pension (£156.20 per week) which has different rules.

Helpful tip: You can use this tool to check when you’ll reach State Pension age, your Pension Credit qualifying age, as well as when you’ll be eligible for free bus travel.

CHECKING YOUR NI RECORD

Log into your Government Gateway account to check your contribution record – you might find that you can claim for missing years. Here’s some examples of scenarios where you may be able to claim back credits:

Caring for a child in the family: Only one parent is able to claim the credits via Child Benefits, but you are able to transfer the credit from one parent to another.

Statutory sick pay: If you are/were on statutory sick pay and not earning enough money to qualify for a year.

Unemployed and actively looking for work: You will need to be able to prove that you were looking for employment, but you don’t need to have claimed jobseeker’s allowance.

On jury service: If you weren’t self-employed and were on jury service.

A foster carer: since 6 April 2010.

On statutory maternity, paternity or adoption pay: If you were on it but didn’t earn enough money to qualify for a NI year.

Spouse of a member of the armed forces: If you went overseas and are married to, or are a civil partner of a member of the armed forces.

On a Government-approved training course: You weren’t sent on the course by Jobcentre Plus, but are/were over 18 and on an approved course.

It’s worth noting that the younger you are, the more time you’ll have to plug any gaps in your record naturally. You can check your state pension forecast here.

HOW MUCH CAN YOUR STATE PENSION BE BOOSTED?

The current cost of Voluntary Class 3 NI contributions is £15.85 per week (£824.20 per year). But if you are looking to fill gaps from the previous two years, you will pay the rates that occurred in those years.

2020-21: £15.30 per week

2021-22: £15.40 per week

You could be adding up to £275 to your pre-tax State Pension per year (1/35 of the full rate of the state pension worth £9,627.80 a year) – so after 3 years you could receive what you have paid for the Voluntary Class 3 NICs.

Helpful tip: LCP have created this useful tool to help you decide whether to boost your state pension this way.

If you need further clarification on the changes to the rules, our Tax Compliance team’s only an email away.

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