12 June 2023
If you are covering the deadline for voluntary National Insurance contributions being extended to April 2025, please see the following comment from Jon Greer, head of retirement policy at Quilter:
"The government’s latest decision to extend the deadline for making voluntary National Insurance contributions until 5 April 2025 should come as a relief to many who have been desperately trying to make NI top ups but have been stumped by reports of long caller wait times.
"This move provides a significantly longer period for people to evaluate their current state pension plans and determine whether filling gaps in their National Insurance records could improve their retirement income. This will hopefully help avoid any further log jams for the government and more people can take advantage of what can be a very valuable bit of retirement planning. Ultimately, this represents a golden opportunity and people should not squander it.
"Over the past two decades, our Freedom of Information (FOI) request revealed that more than four million individuals have made these advantageous Class 3 National Insurance Contributions (NICs). And with this deadline extension, we hope that even more people will benefit from this opportunity. On average, approximately 193,000 people annually have made these top-ups from the 2000/01 tax year to the 2020/21 tax year.
"The extended deadline will particularly impact those aged between 45 and 70 with gaps in their NI records and these individuals should take action to check whether they can maximise their retirement benefits if they can afford to.
"Consider someone with ten missing years in their NI record. They could pay around £8,000 to close these gaps and potentially boost their state pension income by £55,000 over a typical 20-year retirement. This represents an excellent investment for those who are eligible and can afford it.
"However, it’s important to check whether making these contributions will be advantageous first. The initial step should be visiting the gov.uk website and using the 'State Pension forecast' to understand your current state pension based on your NI record and the potential amount if you continue to contribute until your state pension age. If you find that you aren't predicted to get the full amount (currently £203.85 a week), you should investigate any potential gaps in your record and fill them if you can.
"Not everyone will benefit from paying voluntary contributions, so it's vital to also contact the Future Pension Centre on 0800 7310175. They can provide personalised advice on whether paying extra will increase your state pension entitlement. It might turn out to be one of the most beneficial calls you make in planning for your retirement."
