A crucial deadline is looming to fill gaps in your National Insurance record and boost your State Pension income.
Until 5th April, you can make voluntary National Insurance contributions to plug any gaps in your record between 2006 to 2018. But from 6th April, you will only be able to fill any gaps for the last six tax years as normal rules resume.
Filling in missing years in your National Insurance (NI) record is hugely valuable because receiving a full State Pension isn’t guaranteed. It usually requires 35 years of National Insurance contributions.
So, how do voluntary NI contributions work, and why is this temporary rule change so valuable?
Why is plugging gaps important?
Despite the rise of private pension wealth, the state pension will still form a large portion of most people’s retirement income. So, taking steps to get the most State Pension income possible is vital.
Making voluntary NI contributions gives you the chance to buy additional “qualifying years” to fill any gaps in your NI record. And that’s important because your final income depends on your National Insurance contributions.
You need 35 “qualifying years” in your National Insurance record to guarantee the full State Pension income. And if you have gaps, it could lead to a reduced annual income.
The full State Pension will rise to £11,973 in April, but each missing year will potentially reduce your income by £342, and an individual with only 20 qualifying years would receive just £6,842 annually instead of the full State Pension.
Buying one additional year costs £907 and can boost your annual State Pension income by £342 every year in retirement. This means you could recover your initial outlay in just three years. And over 20 years, you could be looking at an additional £6,842 in State Pension income.
What’s the deadline?
It’s important to act now, as the crucial window that allows taxpayers to plug gaps in their NI records between the 2006/07 and 2018/19 tax years is soon closing.
Initially due to expire in April 2023, the deadline has been extended to 5 April 2025 due to high demand from taxpayers seeking to take advantage of this offer.
However, starting from 6th April 2025, you will only be able to fill gaps in your NI record for tax years from the 2019/20 tax year onward.
Here are more details about how to pay Voluntary National Insurance contributions.
Because of the scale of demand, there will now be some leeway for anyone who struggles to get through on the phone.
The Department for Work and Pensions has confirmed that people who use the online call-back request tool before 5 April will still be able to make voluntary contributions after the 5 April deadline. Take a screenshot of your callback confirmation message as proof.
How much could you boost your State Pension?
If you have holes in your NI record, making voluntary contributions could prove exceptional value. The additional income you receive usually far exceeds the cost of voluntary contributions.
Purchasing an additional qualifying year for £907 can boost your annual State Pension income by £342 each year, adding up to £3,421 over ten years.
It’s an even better deal for self-employed workers who have a lower rate of voluntary NI contributions. They can buy an extra year of contributions for just £179.
Someone with significant gaps who buys 18 years’ worth of qualifying years, the current maximum, could add £6,158 extra State Pension income per year and £123,151 over 20 years in retirement.
This table shows the enormous potential impact of voluntary contributions.
