Thousands of people have been given more time to plug gaps in their pension after the Department of Work and Pensions (DWP) was overwhelmed with demand in the lead up to the original deadline of April 5.
The DWP has now extended the last date to buy voluntary National Insurance (NI) payments after a campaign to urge the public to check their pension entitlement led to queues on the phone lines as people scrambled to act before the original April 5 deadline. The cut-off date has now been extended until July 31 to give people more time to ensure they get the full state pension when they retire.
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As part of the "transitional arrangements" to the new state pension, taxpayers have been able to make voluntary contributions to make up for any incomplete years in their National Insurance record between April 2006 and April 2016. But last week, demand led to the DWP saying it was going to "consider" contributions made by people after the April deadline on a case-by-case basis due to the busy phone lines.
A recorded message was placed on a phoneline for the Future Pension Centre to that effect and on Tuesday, a Government spokesperson said the Treasury had listened to public concerns and had acted on them. after worried members of the public raised concerns that they were struggling to get through to jammed DWP and HMRC phone lines.
Victoria Atkins, Financial Secretary to the Treasury, said: "We recognise how important state pensions are for retired individuals, which is why we are giving people more time to fill any gaps in their National Insurance record to help bolster their entitlement."
To receive the full new state pension of £203.85 per week from April, you need to have at least 35 years of contributions on your record, and according to Martin Lewis, paying voluntary contributions reasons could turn out to be "incredibly lucrative" for 45-70 year olds. "Many can spend £800 or less (on contributions) and get £5,500 back," he said.
Buying back missed years can be a good way to boost retirement income as the full new state pension will be worth up to £10,600.20 over the 2023/24 financial year - paid every four weeks at £203.85. People can make up any NI gaps in their record going back as far as 2006, but after July 31, you will only be able to go back six years. Here's everything you need to know about the scheme:
Why might you have a gap?
You may have gaps or part years in your NI record for a number of reasons, such as if you were a low earner and did not pay NI or if you were unemployed but not claiming benefits. Those who were self-employed or worked abroad may also have gaps in their record.
How to check if you're missing NI years
You can check your state pension summary on Gov.uk. Just fill in your details and it will tell you whether your pension is forecast to be at the full state pension level. You can also check your national insurance record on Gov.uk.
Check if you're due free national insurance credits
You may be able to get missing years back without paying for them if for example, if you were a carer, you had childcare responsibilities or an illness which prevented you working for a time. Check in the National Insurance credits section of Gov.uk
You can buy more years if you need them
If you can't get your missing years made up for nothing, you can buy them. The standard cost of buying National Insurance contributions is £15.85 for a week of missing contributions in the 2022-23 tax year. It would cost you £824.20 for an entire year.
However, if you are looking to fill gaps that occurred in the past two tax years, you would pay the rate from those years. Voluntary contributions for gaps in 2021-22 cost £15.40 per week; for gaps in 2020-21, the cost is £15.30 per week. For those able to fill gaps between 2006 and 2016, the cost for a week is £15.40.
You can find out how to pay here.
How many years NI contributions are needed for a full pension?
You now need 35 years of NI contributions to qualify for the full state pension, which is worth £185.15 a week in 2022-23. To qualify for any state pension at all, you need 10 years of contributions.
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