HMRC has now announced that taxpayers have an extra two years to April 2025 for Voluntary National Insurance Contributions, to fill in gaps in their national insurance so they can get the full state pension.
This was due to end next month but HMRC has announced claims of delays in the system and to take advantage of the scheme, this does only apply to those who have reached the state pension age after 5th April 2016.
To qualify for a full new state pension, which is £203.85 a week, you typically need to have a 35-year history of paying national insurance contributions.
To do this, you need to pay voluntary class 3 NI contributions of £15.85 a week, or £824.20 a year. This one-off payment can add up to one-35th of the full rate to your eventual state pension. A boost that is worth £5.82 a week, or £302.86 a year.
Former pensions minister, Steve Webb, says '' in the case of someone who wanted to top up 10 years of contributions, they would have to give £8,242 (10 lots of £824.20) to the taxman. And, for that, they would get an annual boost of £3,028 – or just over £60,000 over a 20-year retirement.''
However, many taxpayers will have gaps in their NI contributions, which does mean they will not get the full amount. This could be someone who takes time off in their career to look after children, members of family or those who live abroad.
Taxpayers do need to check if this scheme is right for them and it is important to talk through their options with the Department for Work and Pensions.
Speak with us if you have any questions about your National Insurance Contributions.
