If you have read our recent article on the subject, you’ll be aware that you can pay voluntary National Insurance contributions to top up your state pension. To qualify for the full state pension you need 35 years of qualifying NI contributions. If you have between 10 and 35 qualifying years, you’ll only get a proportion of the full pension. However, if you opt to pay voluntary NI contributions, they effectively work as a state pension top up.

Currently, you can top up any ‘missing’ NI years back to 2006. However, the government had previously announced that, from April 2023, you’ll only be able to top up the most recent six years in your NI record.

This has now changed, and the government has said that the state pension top up deadline has been extended. You now have until 31 July 2023 to fill in any gaps going back to 2006.

Why has the state pension top up deadline been extended?

The government says that it has listened to concerns of members of the public, many of whom felt the original deadline was too soon. As a result, it announced the extension of the state pension top up deadline in a written ministerial statement by Victoria Atkins, the Financial Secretary to the Treasury.

Is it worth topping up my state pension?

If you have fewer than 35 years of qualifying NI contributions, it could benefit you in the long run if you top up your pension. The cost of ‘buying’ a missed year is £824. You can recoup this sum within 3 years of retiring. This is because each extra year will add approximately £275 to your annual pension.

How can I find out whether I need to top up my pension?

It’s very easy to discover whether you have any gaps in your National Insurance record. If you have a Government Gateway account, you can check your NI record online. You can do this here.

Once you know how many full NI years you have, you can make the decision on whether a state pension top up is worth it.

For example, if you are 65 and you have 15 ‘missing’ years in your NI record, you can get the full pension at 66 if you top up your pension so that it has 35 full years when your reach the current state pension age of 66. You will only be able to do this until 31 July 2023, so it’s important to act quickly.

On the other hand, if you believe that you’ll only be six (or fewer) NI years short by the time you reach the state pension age, then you may not need to act. Because you’ll still be able to ‘buy’ up to six years, you can add them incrementally before you get to retirement.

I need some help reviewing my pension entitlement

If you’re a THP client and you need some help reviewing your pension entitlement, get in touch. We’d be very happy to offer you a pension review. We can also help you with a range of estate planning services, including Will writing and setting up a Lasting Power of Attorney.

Need further advice on any of the topics being discussed? Get in touch and see how we can help.

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    About Jon Pryse-Jones

    Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.

    An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”

    Jon’s appreciation for THP extends to his fellow team members and the board.  “They really know how to run a successful business,” he says.  He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.

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