The entitlement to a full state pension at retirement age relies mainly on an individual having sufficient ‘qualifying years’ of National Insurance Contributions.
- Most people require 35 qualifying years of National Insurance Contributions in order to qualify for the full State Pension
- For many, the 35 qualifying years will not be a problem as they will have been accrued during their working lives in one way or another.
- However, for some individuals there may be gaps in their National Insurance record for a number of reasons including but not limited to, being employed but on very low earnings, being unemployed and not making a claim for benefits, living and working outside the UK or being self-employed but having very small profits (or losses).
- For a number of years HMRC have allowed individuals who may not have otherwise obtained a qualifying year of National Insurance, to make ‘voluntary National Insurance’ payments to cover gaps in their records. However, the time limit for making these voluntary contributions is being shortened with effect from 6 April 2023 to only allow contributions to be brought up to date for the previous 6 tax years.
- More information on these changes can be found at this HMRC link: Voluntary National Insurance: How and when to pay – GOV.UK (www.gov.uk)
- It may therefore be a good idea to obtain a State Pension Forecast, this can be obtained (if you have a Government Gateway account or are prepared to set one up) by following this link Check your State Pension forecast – GOV.UK (www.gov.uk) and clicking the green Start Now button.
- Applying online is the quickest way of obtaining the forecast, however, you can also print, complete and post to the Pensions Service form BR19 which is available on this link Check your State Pension forecast – GOV.UK (www.gov.uk) or alternatively call the Future Pensions Centre on 0800 731 0175 who will post a copy of the forecast to you.
- Once you have received the relevant State Pension Forecast, please review it to check for any gaps in your record. A decision can then be made as to whether it is cost effective to make a ‘top up’ payment before 5 April 2023 to cover any missing years.
The ability to make top up payments dating back to 2006, which can currently be made for certain individuals (males born after 1951 and females born after 1953) will end on 5 April 2023 – so if that could be beneficial to you, you need to take action and review the position now. After that date, the top up payment is restricted to a maximum of 6 previous years, which could impact overall entitlement to a full state pension.
Should you have any queries or require our assistance, please do not hesitate to contact Tom Bleasdale (firstname.lastname@example.org).
If a review of your forecast/entitlement is required, then it may be necessary for us to provide a fee quote for the work involved.
Building value, together