27 March 2023
If you’re not sure, you need to act before 31 July 2023!
The New State Pension will be increasing in April from £185.15 per week to £203.85 (taking it to £10,600 per year) and for lots of us this will be a large proportion of our overall retirement income.
However, did you know that if your National Insurance (NI) records have gaps in them, you may not get this full amount?
At the moment, if you have gaps in your NI records, you can make voluntary contributions to cover gaps back to April 2006. This window was due to end on 5 April 2023, however the deadline has been extended to 31 July 2023. After this date, you will only be able to go back a maximum of 6 years (e.g. from the coming tax year 2023/24, you will only be able to make up gaps as far back as 2017/18 tax year).
So what should you do if you are unsure?
The first thing to do is get a State Pension forecast which will tell you how much State Pension you may get.
You can then apply for a National Insurance statement from HMRC to check if your record has gaps.
If you find you do have gaps in your NI records you may still get the full new State Pension, however, if these gaps prevent this you have some options which I have mentioned in the further information below.
You can also find out more about how filling gaps can affect your State Pension by contacting the Future Pension Centre.
If you would like to know a few basics about who is entitled to the new State Pension and how the pension is calculated I have put some details below.
• The new State Pension is for:
o men born after 6 April 1951 and
o women born after 6 April 1953
• It is based on your NI records when you reach State Pension Age
• You need at least 10 qualifying years to get any new State Pension
• You’ll need 35 qualifying years to get the full amount if you do not have a NI record before 6 April 2016
• You may get less than the new full State Pension if you were contracted out before 6 April 2016
• You may get more than the new full State Pension if you would have had over a certain amount of additional State Pension under the old rules
Qualifying Years
When you are working you will get qualifying years if:
• You’re paying NI contributions which can be either of:
o Employed: earning over £242 per week from one employer
o Self-employed and paying NI contributions (profits of over £11,908)
• You are employed but not earning enough to pay NI but you earn between £123 and £242 a week from one employer
If you are not employed, you may still get NI credits if you:
• Claim child benefit for a child under 12 (or under 16 before 2010)
• Get Jobseeker’s Allowance or Employment and Support Allowance
• Get Carer’s Allowance
• You are ill, disabled or on sick pay
Finally, if you’re not working or getting NI credits you may be able to pay voluntary NI contributions to increase your State Pension amount.
Topping up one qualifying year of £824.20 translates to £275.08 extra per year in state pension. The cost will be increasing from 1st August to £907.40 but you will be getting an extra £302.86 a year in pension due to the increase in April 2023.
