State pension boost available to millions but 'deadline' is fast approaching
A state pension boost is available for millions of people but a "deadline" is looming. Women have been sent an urgent state pension National Insurance message before the 2025 deadline next year, it has been warned this week.
Some 3.7 million people have used a new online checking tool on GOV.UK to view their State Pension forecast and understand if they are able to pay any missing NI contributions. The Department for Work and Pensions ( DWP ) has launched digital service to facilitate these payments, which has already seen substantial uptake.
People need to have 35 years of National Insurance contributions under their belt to get the full, new state pension. Since April 2024, over 10,000 payments totalling £12.5million have been made through the new digital service to boost state pensions.
The online checking tool on GOV.UK has seen significant engagement, with 3.7 million people using it to view their state pension forecast. Emma Reynolds, Minister for Pensions, commented to say: "We want pensioners of today and tomorrow to enjoy the dignity and support they deserve in retirement. That’s why I urge everyone to check if they could benefit by filling gaps before the deadline passes."
Anita Wright, an Independent Financial Adviser at Bolton James Ltd, said: "For many, the State Pension remains the only guaranteed income source that is linked to inflation through the triple lock, making it a vital part of retirement security."
She went on: "If anyone has a gap in their NI record, paying voluntary contributions could significantly boost their future income. For example, paying £907.40 for a year’s worth of contributions in 2024/25 will secure an additional £328.636 annually for life, indexed to inflation."
Wright said: "Put another way, within three years of the person’s State pension income commencing, the investment will have been fully returned." She continued to say: "While the State Pension alone may not cover all retirement needs, it can still form a crucial part of the overall plan."
Alice Haine, Personal Finance Analyst at Bestinvest by Evelyn Partners, said: "Taxpayers with any shortfalls in their state pension record have been urged by the Government to act now and plug the gap by making voluntary contributions before this golden opportunity to maximise their state pension passes.
"People can currently plug any shortfalls by backdating their National Insurance (NI) contributions - but the clock is ticking as the deadline to take advantage of this one-off concession closes in less than six months. Buying back missed years can be a great way for many people to bolster retirement income as the state pension provides a guaranteed monthly income for the duration of your retirement. Most importantly, that income is currently set to increase year-on-year by at least 2.5 percent and probably more, because of the triple lock."
She further added: "Typically, taxpayers can only backdate their NI contribution history by six years, but the government is currently allowing people to pay to fill gaps on their NI record all the way back to April 6, 2006 – an extremely beneficial move designed to help those affected by new State Pension transitional arrangements.
"After the April 5, 2025, deadline next year, the system will revert to the normal time limits, which means people will only be able to make voluntary contributions for the previous six tax years. Your state pension entitlement is determined by the number of qualifying NI years you have. People typically need at least 10 qualifying years of NI contributions to receive any state pension at all and at least 35 years to receive the full new state pension – though they don’t need to be consecutive years."