Typically, a person who receives a state pension will have made 35 years’ worth of National Insurance contributions.*
But there will always be people who haven’t and will therefore miss out.
You might have been off work for several years because you had children or caring responsibilities. Or perhaps you lived overseas, or were recovering from an accident or illness and were unable to work as a result.
NI credits are received in some of these circumstances – see https://www.gov.uk/national-insurance-credits/eligibility
Thankfully, that doesn’t preclude you from being eligible for a state pension in later life, as you can always purchase National Insurance credits to fill any gaps in your record for the previous six years.
But if you want to make contributions for gaps going back further, you should be aware that a deadline is fast approaching.
Males born after April 5th 1951 and females born after April 5th 1953, have until 31st July to make contributions for between 2006 and 2016.
Originally, the government had set a deadline of April 5th, but high demand led to phones at HM Revenue and Customs ringing off the hook and people being unable to get through.
This has led to the government extending the end date, which should be a relief if you’re one of those who has so far struggled to speak to the department about this.
As Victoria Atkins, the Financial Secretary to the Treasury, said: “We recognise how important state pensions are for retired individuals, which is why we are giving people more time to fill any gaps in their National Insurance record to help bolster their entitlement.”
Of course, if you have a private pension scheme already, as well as several workplace pensions, you might not feel you need to buy National Insurance credits right now.
But while the state pension might not be enough to live off by itself, it could still be a good way to top up your income during retirement, and enjoy the type of lifestyle you want in the future.
You wouldn’t ordinarily turn down free money, would you? So, you have nothing to lose by making sure you’re eligible to receive what you’re entitled to further down the line.
You can check your National Insurance record on the GOV.UK website to find out if you have any gaps, if you’re eligible to make voluntary contributions and what it will cost.
If you’ve been out of the workplace for any extended period since April 2006, don’t delay. You could be thousands of pounds better off in the future if you act now.
If you have any questions about maximising your pension income for retirement, please get in touch with us. We’re here to help you get the answers you need.
*35 years will be required for all those who only started their NI record after 5 April 2016. Those with a long pre-6 April 2016 NI record may achieve a full state pension after less (as only 30 years was required under the old system and the foundation amount in 2016 was the higher of the two systems).