Each week seems to bring more depressing news on how the state pension retirement age is continuing to rise; which is why it is more important than ever to try and make sure you maximise your full state pension entitlement when the time comes.  Back in January we shared the news that you had until 5 April 2023 to identify if there were any historic gaps in your NI contributions. However, due to unprecedented demand and blocked phone lines, this deadline has now been extended by the HMRC until 31 July 2023. Find out how to check if you have any gaps and what you can do to potentially boost your state pension.

If you are not even aware of the current status of your state pension, now is the time to check if you have any missing years where you may not have paid your NI contributions – which all go towards qualifying for your full state pension.  If you have been out of work for any period of time which includes gap years, raising children or caring for parents, this could mean you won’t receive your full state pension unless you fill any qualifying gaps.

Under the current rules, it is only possible to fill gaps in your NI record up to six years after the year in question.  Following this the missing year becomes a permanent gap in your record and could affect your ability to build up a full state pension. Therefore, 2016-17 would be the oldest year which could be filled in 2022-23.  However, until 31 July, those aged between 45-70 are now able to go further back and fill gaps for any year from 2006-07 onwards which is an extra ten years.

Other people that may find they have gaps in their NI contributions are those who are employed but have or had low earnings, the unemployed who are not claiming benefits, self-employed who did not pay contributions because of small profits, or if you were living or working outside the UK.

It is also worth checking your records if you have been the person in your family claiming Child Benefit, as this automatically counts towards your NI contributions if you have a period of not working whilst raising children. This is however, only for the person claiming the Child Benefit and does not count towards their partner/spouse’s NI contributions.

The new rule does only apply to those who come under the new state pension system, so it is those people who reached, or will reach, state pension age after 5 April, 2016. It can take some time to work your way through the necessary steps, so people are being encouraged to go online and check sooner rather than later at https://www.gov.uk/check-national-insurance-record

The rules also state that in order to qualify for the full state pension you must have been contributing to NI for 35 years and were never in contracted out employment. You are able to fill any gaps in your NI contributions by paying £800 per missing year before the 31 July deadline. By doing this, it will mean you’ll get more state pension for every year of your life when you retire, so that investment could bring you thousands in future years. It’s important to do so before the deadline, as then you will only be able to fill gaps going back six years.

Pensions – both state and private are an extremely complicated subject matter and it always pays to speak to a Financial Advisor to check you are covering yourself and are going in the right direction to be able to take the pension amount that you need in retirement.  If you or someone you know would benefit from speaking to one of our Financial Advisors, please do get in touch.