As reported in July 2023’s Employer Focus, the normal deadline for paying voluntary National Insurance Contributions (NICs) has been temporarily extended for individuals with gaps in their NIC record arising after April 2006. Affected individuals have until 5 April 2025 to fill any NIC gaps, which could boost their State Pension entitlement.

We recapped how NIC gaps can arise, and the potential benefit of paying voluntary contributions in our previous article when the NIC ‘top up’ deadline was extended.

To help individuals wanting to make voluntary NIC payments, the Check your State Pension forecast tool has been expanded. Users can now check their current and predicted State Pension entitlement, before going on to review whether voluntary NIC payments could increase these amounts.

Anyone with gaps in their NIC record should be shown how much it would cost in voluntary NIC payments to fill that gap in order to make a full year of qualifying NIC payments. Most users should then be shown the impact that top up payment is expected to have on their weekly State Pension entitlement, before having the option to make a voluntary payment online direct from their bank account.

Think before you pay

Whilst the expanded digital services are a useful tool, they still have limitations.

Firstly, anyone with gaps in their NIC record relating to periods when they were self-employed or were working or living abroad can’t access the full service. Instead, they will be advised to contact the Future Pension Centre if gaps in their NIC record are identified. This is because there may be cheaper ways to top up their NIC record, which are not supported by the digital service.

Secondly, anyone who identifies gaps in their NIC record will need to consider their future working plans before making any voluntary contributions. For instance, anyone expecting to still work sufficient years to accrue the 35 years of full NIC contributions needed to secure a full State Pension may not need to make voluntary payments.

Finally, it is worth remembering that the State Pension forecasts provided may not prove accurate if changes are made to the rules regarding pension entitlement before users reach State Pension age.

 

This article reflects the position at the date of publication shown above. If you are reading this at a later date you are advised to check that that position has not changed in the time since.    

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