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Daily Record
Daily Record
Lifestyle
Linda Howard

People may be able to boost State Pension without spending any money on National Insurance gap years

People have been given nearly two extra years to plug gaps in their National Insurance (NI) record going back to April 2006, which could help boost State Pension payments. The original cut-off for voluntary NI contributions from April 2006 to April 2017 was April 5 2023 but in March this deadline was extended to July 31 2023.

HM Revenue and Customs (HMRC) has said the deadline will be extended until April 5 2025 which means people have more time to properly consider whether paying voluntary contributions, which could boost their state pension entitlement, is right for them, the UK Government said.

However, Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, warns not everyone benefits from paying for voluntary NI contributions and urges anyone thinking about doing it to contact the Department for Work and Pensions (DWP) directly, before parting with any money.

Ms Morrissey said: “This extension will come as an enormous relief to those people worried about meeting the deadline to boost their State Pension. The deadline to plug gaps going back to 2006 through voluntary National Insurance contributions was initially set for April but was shifted until the end of July due to enormous demand which put DWP telephone lines under pressure.

“This further deadline extension to April 2025 means people can take the time to think about what’s best for them. Buying voluntary NI credits is a great way of boosting your State Pension but it is vital that you check before handing over any money as you may be able to plug some of these gaps in another way - by backdating a benefit claim for instance.”

The retirement expert explained that if you have been contracted out at any point you also may not benefit from making voluntary contributions, so you need to check.

She added: “This extra time means people can make sure they are making the right decision for their circumstances and give more people the opportunity to make a real difference to how much state pension they get.”

State Pension payment rates 2023/24

To get the full New State Pension you need around 35 years’ worth of NI contributions and to receive any payment from it at all, you need at least 10 years. Payments increased on April 10, however, the first payment after this date will contain a mix of old and new pay rates - full payments with the new rates should start in May.

Full New State Pension

You are eligible for the New State Pension if you are:

  • a man born on or after April 6, 1951
  • a woman born on or after April 6, 1953

New State Pension payment rates

  • Weekly rate: £203.85
  • Four-weekly rate: £815.40

Basic State Pension (Category A or B)

You are eligible for the Basic State Pension if you are:

  • a man born before April 6, 1951
  • a woman born before April 6, 1953

Basic State Pension payment rates

  • Weekly rate: £156.20
  • Four-weekly rate: £624.80
Always check with DWP first if will be worthwhile plugging gaps in your NI record. (Getty)

How to boost your State Pension

Check your State Pension forecast

The first thing you need to do is go online and check your State Pension entitlement on the ‘Check your State Pension forecast’ page on the GOV.UK website here. This will identify any missing or part-paid National Insurance contributions years - if you do have any, more details on what to do are in the next section.

The forecast tool will also tell you your State Pension age - when you can officially retire and start collecting payments.

Buy National Insurance credits

Buy NI credits – If you can spare the cash, you can plug gaps in your NI record by buying voluntary class 3 NI contributions. Buying a full extra year costs around £900 though partial years will be cheaper.

Each year bought you get 1/35th of a year’s state pension – around £300. This means you effectively earn your money back in around three years so it can prove very good value.

It is, however, really important to check that it is worth your while paying for these credits so always check with DWP before doing so.

Contact the Future Pension Service on 0800 731 0175 to double check how many years you can buy and whether voluntary contributions will add to your State Pension. Those who have already reached retirement age must contact the Pension Service on 0800 731 0469. Find out more about plugging gaps in your National Insurance record on GOV.UK here.

Claim Child Benefit

Women in particular miss out on valuable State Pension credits when they are at home looking after children. However, if they claim Child Benefit, they will receive National Insurance credits that count towards their State Pension. Many women have missed out on this in the past because their husband claimed the Child Benefit rather than themselves.

Others missed out when they opted out of Child Benefit after the introduction of the High-Income Child Benefit Tax Charge. If you claim Child Benefit in your name, then you will get the National Insurance credit towards your State Pension.

Specified Adult Childcare Credit

Are you below State Pension age and looking after a family member under the age of 12 while their parent or main carer goes back to work?

If this is the case, you could qualify for National Insurance credits under Specified Adult Childcare Credit as the working parent essentially transfers their NI credit to you.

There are other situations where you are receiving benefits and you can still claim National Insurance credits. For example, if you are off work sick on Statutory Sick Pay. It is always worth checking to see if you may be entitled.

Can you claim Pension Credit?

Pension Credit aims to top up the incomes of the poorest pensioners and acts as a valuable gateway to other benefits such as help with heating costs, Council Tax and a free TV licence for the over-75s.

Pension Credit claimants are also entitled to £599cost of living payment due to be paid in two stages over the coming months.

To keep up to date with the latest State Pension news, join our Money Saving Scotland Facebook page here, follow us on Twitter @Record_Money, or subscribe to our newsletter which goes out Monday to Friday - sign up here.

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