Extended window to boost your State Pension

5 April was HMRC’s looming deadline to make up any shortfall on your National Insurance Contributions (NIC) for tax years 2016/17 and 2017/18. This deadline’s now been softened. So, as long as you get your payments or callback request in by 5 April, you can still benefit, but after this date, you’ll only be able to fill gaps from the past six years. If you’re eligible, you have an extra opportunity to top up any gaps in your contribution history which could significantly boost your future state pension payouts. It’s especially relevant if you were self-employed or had periods out of work during the tax years 2016/17 and 2017/18.

The key take-home is pay this sooner rather than later.

Once you’ve paid, the Department for Work and Pensions (DWP) and HMRC will process the payment and update your record.

 

WHAT’S THE STATE PENSION?

Since 1948, the State Pension has provided financial security to retirees. With life expectancy rising, it’s important you know how much State Pension you’re entitled to and how you can boost it.

 

HOW MUCH STATE PENSION ARE YOU ENTITLED TO?

The amount you receive depends on your NI contributions.

As an example, to get the full state pension (£11,973 a year) when you’re 66, you’ll need 35 qualifying years of NICs. If you’ve fewer than 35 qualifying years, your pension will be reduced.

• Check your State Pension age (as well as your Pension Credit qualifying age and free bus travel eligibility)
• Check your State Pension forecast via the HMRC app

 

NEW STATE PENSION VS BASIC STATE PENSION

• Those who reached State Pension age after April 2016 will receive the new State Pension (£230.25 per week, or £11,973 a year)
• Thos who reached State Pension age before April 2016 will receive the basic State Pension (£169.50 per week)
• The New State Pension will increase by 4.1% from April 2025 (based on inflation as measured by CPI, Sept 2024)

 

THE NATIONAL INSURANCE QUALIFYING YEAR

Work and earn: If you work and earn above a certain amount, you’ll automatically pay NI contributions from your salary. This helps build up your qualifying years.

Credits: If you’re not working or earning enough, you might still get NI credits, like if you’re unemployed and looking for work, or if you’re a parent with young children and receiving Child Benefit.

Self-employment: If you’re self-employed, you’ll need to pay NI contributions.

You need 35 qualifying years to get the full State Pension amount.

 

PLUG THOSE GAPS

The deadline to make voluntary contributions for tax years 2016/17 and 2017/18 was extended to 5 April 2025—this deadline’s now been softened.

A spokesman for the DWP said, the “online tool would mean that people would be able to make top-up payments after the 5 April deadline, provided they complete the call-back request form ahead of that date.”

This gives you a little more time to fill any gaps in your NI record.

If you need further clarification on these new tax rules, our Tax Compliance team’s only an email away. They’ll be more than happy to help.

Don’t forget to check your State Pension record here or via the HMRC app.

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