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.
As a professional rugby player, the nature of your work means you may have gaps in your record. For example, if you have played or are currently playing abroad, this could leave you with gaps in your NI record. This may also be the case if you played in the UK and are now retired, but live abroad instead.
Similarly, if you had a break during your playing career or between your playing and second careers, you might also have missed out on years then.
As a result, it is possible that you have gaps that you could fill before the deadline on 31 July.
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 NI record still matters, even if you are in the middle of your playing career
Understandably, an issue such as your State Pension can seem low down on your list of priorities if you are in the middle of a rugby playing career. After all, you will have many years to plan for the future later down the line, so why spend time worrying about this now?
But in reality, this matter is just as important for you as for those in other occupations for a couple of reasons.
The first is the time pressure associated with topping up your record now. Once this deadline has passed, you will only be able to fill in gaps from up to six years ago, rather than all the way back to 2006.
Furthermore, there is a clear financial incentive for younger individuals to consider filling these gaps. Indeed, as MoneySavingExpert explains, those aged under 45 may find partial years they can buy for as little as £15.
Additionally, while planning for your retirement may feel many years away when you are plying your trade on the pitch, planning early can pay dividends down the line.
In fact, you may have read our previous article on this topic, in which we discussed the benefits of early planning for professional rugby players. For example, we looked at:
- How short your playing career really is, and why you need to make the most of it
- The benefits of investing sooner rather than later to give your money the best chance of growing in the markets
- Why setting goals for the future can define how much you really need.
So, planning to receive the full amount from the State Pension can be a sensible choice, helping to give you a clearer picture of your income in later life, and how this money will help to support you in living your desired lifestyle.
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 enquiries@dbl-am.com 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.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
