Currently, there is an extension in place allowing people to make good missing years of NI contributions as far back as 2006/2007 – so 16 years. The usual time period allowed for topping up past NI contributions is six years, and the system will revert back to this after April 5, 2023.
The State Pension is an important source of income for most people in retirement. In April this year it will increase by 10.1% to £10,600 per year. Therefore a couple who each receive a full State pension can receive £21,200 per year before taking income from other pensions and savings. This assumes the full new State Pension is received, and this requires a minimum of 35 qualifying years of NI contributions. Quite often, people have patchy records and they may be some years short when it comes to retirement age.
My advice to clients is to ensure their State Pension is fully funded. The cost of making up missing years is extremely attractive when compared to the additional pension you will receive as a result – it really is the best deal in town where pensions are concerned! You need 35 qualifying years of NI contributions on your record to receive the full State Pension, and a minimum of 10 qualifying years to get a partial pension.
You can check your National Insurance record online at https://www.gov.uk/check-national-insurance-record but you may need to set up a Government Gateway ID and password first. When you do so, try to identify any discrepancies between your own PAYE records and what HMRC have recorded, and followed them up promptly. And see about paying for missing years if they won’t be made up by future years’ contributions.
The timeframe to make voluntary contributions to top up missing years will revert to 6 prior years only on April 5, 2023 so do take the time to check this if you think there is any doubt as to the completeness of your National Insurance contributions payments record.