There is just over a month left to check and fill any gaps in National Insurance (NI) records going back to 2006 to boost State Pension entitlement. As a minimum of 35 years of NI is needed to receive the full State Pension payment, anyone who thinks that they may have any gaps in their records should check their entitlement now so they can consider filling these before 5 April. After this date, individuals will only be able to make voluntary contributions for the last 6 years of NI credit.
Currently NI credits can be purchased for those who are employed. The cost of this is £17.45 per week, or £907.40 to plug the gap for a full year in your record. Each extra complete year of National Insurance purchased will give up to £6.32 more a week (£328.64 a year) in State Pension, before any annual increase.
According to MoneyHelper, the point of making voluntary National Insurance contributions is to pay a small amount now, so you get more State Pension in the long run.
For example, you could pay between £15.30 and £907.40 for one extra National Insurance year and get back:
- over £1,600 if you lived for another five years, and
- over £6,500 if you lived another 20 years.
It can take a number of years to get back what you pay in, so people should think how long they will expect to get their State Pension for. If someone was to die before reaching State Pension age, they wouldn’t get anything back.
Individuals can make an enquiry to find out their entitlement by requesting a State Pension statement using a form called a BR19, which is available online or by calling the government helpline on 0345 3000 168. Alternatively, those who have a Government Gateway account can access these details online.
Jonathan Watts-Lay, Director at WEALTH at work, comments; “With the 5 April deadline fast approaching, it is important for those who think they may have not built enough entitlement to receive the full State Pension to check their records now. Those who have a gap of more than 6 years in National Insurance contributions, which may include those who have taken a career break, have worked abroad or had time off for child or elderly care, may want to consider filling these gaps in their record now to ensure they are on track to receive the full State Pension entitlement at retirement.”
He adds; “It’s exceptionally important that people get the support needed to understand all their options when approaching retirement so that they are able to make informed decisions. This includes realising all the options for creating a retirement income such as a workplace pension or any other saving such as an ISA, as well how to find out their state pension entitlement. Many leading companies now provide this support in the workplace through financial education, guidance and investment advice. So, it’s always worth speaking to your employee to see what support they provide.”