Rules on Voluntary National Insurance contributions are changing

For men born after 5 April 1951 and women born after 5 April 1953, there is still a narrow timeframe to potentially boost your State Pension entitlement by way of voluntary National Insurance (NI) contributions. The current extended window, which allows eligible people to make up gaps between tax years April 2006 and April 2016, is coming to an end on 5 April 2023. After this date voluntary NI payments can only be made for the past 6 years.

Your ‘flat-rate’ State Pension (for those who reached pension age on or after 2016)

A 'flat-rate' state pension was brought in on 6th April 2016. While the overhaul was designed to make the system easier to understand, it's still far from simple.

The flat-rate state pension ONLY applies to those reaching state pension age on or after 6 April 2016. This means millions of older people have simply carried on receiving their state pension under the previous system.

The full new State Pension is currently ￡185.15 per week. What you’ll receive is based on your National Insurance record.

You’ll usually need at least 10 qualifying years on your National Insurance record to get any State Pension and 35 qualifying years to get the full new State Pension.

You will get a proportion of the new State Pension if you have between 10 and 35 qualifying years.

What’s happening in April?

You have until 5 April 2023 to pay voluntary contributions to make up for gaps between tax years April 2006 and April 2016. After April 5th 2023 (those that qualify) can only make voluntary contributions for the last 6 years.

Boosting your pension

If you're aged between 45 and 70, you may find that buying extra national insurance (NI) years is the best way to boost your state pension. If you're eligible, the returns can be potentially be worthwhile. One year of National Insurance eligibility costs ￡800 which can contribute to your state pension. It’s certainly worthwhile considering.

If you’re a man born after 5 April 1951 or a woman born after 5 April 1953, you have until 5 April 2023 to pay voluntary contributions to make up for gaps between April 2006 and April 2016.

Contact us for advice

If you have any questions about whether you should pay National Insurance Contributions to boost your State Pension , please contact us.

The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.

Thornton Holmes Dip PFS Certs CII (MP&ER)

Tel: 03300 244244