Update – 13 June 2023: The top up period has now been extended from 31 July 2023 to 5 April 2025.
Have or will you reach state pension age after 5 April 2016? If so, you have the chance to fill gaps in your historical National Insurance Contribution (NIC) records, but not for much longer.
Individuals who reached or will reach state pension after 5 April 2016 could have the ability to fill gaps in their historical NIC records for any tax years from 6 April 2006 to date. However, this limited concession is only available until 5 April 2025. After this date, the NIC catch-up window will revert to the normal period of 6 years.
Gaps in your NIC record will affect the level of state pension you can claim on your retirement. By topping up contributions, you may be able to put yourself in the position where you qualify for a full state pension. Paying voluntary Class 3 NIC could cost as little as £824.20 per year, and making an additional contribution can add up to 1/35th of a full state pension (currently at £9,628 pa).
If you are considering making additional contributions, you should first check your NIC record – this can be accessed at https://www.gov.uk/check-national-insurance-record. Checking your record will allow you to clarify whether there are any gaps in your contributions that need filling.
Should you not have a full NIC record, you should check your ability to make additional contributions with the Future Pension Centre at the Department for Work and Pensions. Be aware – in some situations, paying historical contributions will not boost a state pension: this may include individuals who have extensive periods of “contracting out”.
If you are considering making further contributions, it is important to act now, to take advantage of the extended concession. Currently, you are able to top up contributions for the last 16 years, but from 6 April 2025 you will be limited to topping up for the last 6 years.
Filling these NIC gaps could be an opportunity to prepare for your future, but the benefits are not clear-cut. Making additional contributions may not be appropriate for everyone: we recommend that you speak to your independent financial adviser ahead of making additional contributions, to ensure this is the best use of your money.
Please contact us if you would like further information on any of the points raised above.