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Time to top up National Insurance contributions
If you want to ensure you qualify for the full state pension, then now’s the time to top up National Insurance contributions.
Currently, voluntary National Insurance (NI) contributions can be made to plug gaps right back as far as April 2006. However, the deadline to do so by is July 31, 2023 (the original date was April 5, 2023 but HMRC have extended this). After July 31, you will only be able to make voluntary contributions for gaps dating back six years.
Why has the system changed?
In April 2016, the ‘new state pension’ system was introduced, and July 2023 marks the end of the period of transition from the old to the new system.
Who qualifies for the new state pension?
In general, to qualify for the maximum new state pension, you need to have 35 years’ NI contributions or NI credits. To qualify for part payment, you need 10 years’ worth of NI contributions/credits. Rules may differ for those whose NI record started before 6 April 2016 and the number of required years of NI contributions/credits to obtain the full state pension may be higher.
How do I check my pension entitlement?
You can check your National Insurance payment record at https://www.gov.uk/check-national-insurance-record.
If you find you have a shortfall, then until July 31, 2023, you can plug any gaps going back as far as 2006. After that date, you will only be able to go back to the 2017/18 tax year.
If you are a taxpayer, you should also check that there are no discrepancies between your NI record and what you have paid via PAYE or self-assessment. If there are discrepancies, contact HMRC here: https://www.gov.uk/government/organisations/hm-revenue-customs/contact/national-insurance-enquiries-for-employees-and-individuals.
Should you wish to top up any shortfall, you can find more information on how to make a voluntary NI contribution here: https://www.gov.uk/voluntary-national-insurance-contributions/deadlines.
For help and advice with tax planning, please get in touch with the team at Optimum Professional Services.
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