Voluntary National Insurance Contributions (NICs): 31 July Deadline Extended
In March, the DWP and HMRC learned a lesson that you might have thought both bodies would be very familiar with: hard deadlines create last minute surges.
State Pensions and National Insurance contributions, take three
The original deadline, 5 April 2023, had been known about for many years – it was set as part of the transition to the New State Pension regime introduced in 2016. Two aspects of that were worse than its predecessor:
The minimum National Insurance Contributions (NICs) record (including any credits) to receive any State Pension increased from one year to ten; and
The NICs record for a full pension was raised by five years, to 35 years.
To help people with patchy NICs records, the rules for filling up gaps with voluntary NICs were temporarily relaxed, allowing contribution catch-up to go back as far as 2006/07 rather than just the previous six tax years. That was all meant to end on 5 April 2023, after which catch-up would stop at 2017/18.
As the deadline neared, its significance for some people became more apparent thanks to a snowballing press coverage. Stories that rightly – if extremely – suggested one year’s voluntary NICs (£824.20) could mean £58.24 a week of pension drove the flood of enquiries to HMRC and the DWP. Eventually, on 7 March, the tsunami prompted a deadline extension to 31 July 2023. However, on 12 June 2023, the Government announced a further extension. People will now have until 5 April 2025 to fill gaps in their NICs record from April 2006.
If you have gaps in your NICs record from 2006/07, you may be able to boost your State Pension – even if you have already retired – by paying voluntary NICs. But it is not automatically the case you will gain.
This article was prepared by Chris Green, our Head of Financial Planning. We always appreciate your feedback. If you have enjoyed this article or have any specific topics you would like to see addressed in future newsletters, please email us at FPTeam@city-asset.co.uk.