In November, you may have read the article we produced about the April 2023 deadline for filling in historic gaps in your State Pension record.

In it, we explained:

  • How your National Insurance (NI) record can affect how much you will receive from the new State Pension
  • Why there is a deadline for voluntary contributions going back to April 2006 
  • The reasons you may have for not having a full record, and why it might be beneficial to fill the gaps in yours.

However, since we published this article, this deadline has been extended from 5 April 2023 to 31 July 2023, giving you nearly four more months to consider filling in historic gaps in your NI record with voluntary contributions.

So, find out what the extension means, why it might matter to you, and what you may want to consider doing moving forwards.

The deadline to boost your State Pension has been extended from 5 April to 31 July

When the government first introduced the new State Pension in 2016, they also implemented transitional arrangements, allowing individuals to top up their records to make sure they had made sufficient National Insurance contributions (NICs).

Under the new State Pension, you typically need 35 full years of NICs to be eligible for the full State Pension amount. So, if you think you may be short on full years of NICs, it may be worth making voluntary contributions to top up your record.

Typically, you can only go back six years in your record, but these transitional arrangements mean that you can go back as far as April 2006 in making voluntary (Class 2 and 3) NICs. 

These transitional arrangements were then set to expire on 5 April 2023. However, the government has now extended this deadline, taking it to 31 July 2023 instead. After this date, you will only be able to go back six years, meaning you will no longer be able to fill any gaps you may have between 2006 and 2017.

You can use the government website to check your NI record and see whether you have any outstanding years that you could top up in this period. 

Your State Pension benefits can make a significant contribution to your retirement

While there is mathematically a return on voluntary NICs if you have gaps in your record, you may not see the State Pension as particularly important, especially when considered alongside your other savings and investments.

After all, as of April 2023, the full amount you can receive from the new State Pension is £203.85 a week, offering you around £10,600 a year. Realistically, this sum on its own will not be enough to entirely support you in retirement. 

That said, the State Pension can still make a significant contribution to your lifestyle. Once you apply for and start receiving the State Pension, this is a guaranteed sum that you can depend upon receiving.

This might differ from personal pensions or other investments, where the value of your holdings might vary in the market over time. 

As a result, having the State Pension can be useful for meeting your basic costs, such as food shopping and bills, without having to worry about the performance of your invested money.

Crucially, the State Pension is also designed to rise in line with the cost of living over time. Indeed, in 2022/23, the full State Pension amount was £185.15 a week, giving you just over £9,600 a year. But now, after a year of high inflation, this has been increased to the £10,600 figure for 2023/24.

To ensure that the spending power of the State Pension remains the same over time, the government is committed to the “triple lock”, meaning that they increase the amount you receive each year using one of the following three criteria, whichever is highest:

  1. Inflation in the year to September, as recorded on the Consumer Price Index (CPI)
  2. Average earnings growth from May to July, as recorded year-on-year
  3. A flat increase of 2.5%.

This is important, because it means the amount you receive will increase each year, ideally maintaining its spending power over time.

Unless you have other inflation-linked benefits, you may not have any other source of income in retirement that is designed to do this. Again, this can make it ideal for meeting costs that rise over time.

All in all, these two benefits that the State Pension can offer may make it worthwhile for you to top up your NI record to receive as much as you can from it.

Speak to us

If you would like to find out what the extension to this deadline might mean for you, we can help at DBL Asset Management.

Please email or call 01625 529 499 to speak to us today.

Please note

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.