Deadline for State Pension Top Ups Closes in April 2023
The current government scheme that allows individuals to top up their state pension is ending on 5th April 2023.
Time's running out!
Don't let years of hard work go for naught, get your historical gaps in National Insurance covered before it's too late. If you don't take advantage of this scheme soon then those vital contributions could be lost forever – and with them any hopes to retire comfortably in sunny Spain or the Bahamas. So act fast if you want a full state pension later down the line!
The additional 10-year window for top-ups
Under the current scheme, individuals who reached or will reach state pension age after 5 April 2016 are eligible to fill gaps in their NI record going back to 2006/7. However, this scheme is due to close on 5th April this year, reverting to the normal 6 prior years for historical contributions. This means gaps can only be filled in the NI record going back to 2016/17.
How to check if you are on track to get a full State Pension
Visit www.gov.uk/check-state-pension to find out if you are on track to receive the full State Pension.
What to do if you have gaps in your record
For some people, filling the gaps in the State Pension NI contributions record could make a significant difference to retirement benefits. A full year of NI contributions is currently worth around £275 per annum, so topping up your NI record could have a significant impact if you have big gaps. According to Money Marketing, an individual with 10 missing years could pay out around £8,000 to fix the gaps but see an increase of £55,000 in state pension over a typical 20-year retirement.
It's vital to get financial advice before making any changes to your NI contributions as circumstances differ for everyone and topping up may not be the best thing for you to do with spare cash. Anyone thinking of topping up their state pension for these earlier years should check with the Future Pension Centre at the Department for Work and Pensions to make sure it’s the right course of action for them.
Getting support for your pension and personal finances
Pensions are often a source of misunderstanding and confusion. Contact David Masih, our client relationship partner to learn more about how we help you save for the future as well as mitigate your tax. Call 03330 067 123 or email info@onthegoaccountants.co.uk.
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