National insurance: How to plug gaps to boost pension after last chance deadline extended

A deadline for people to voluntarily plug gaps in their national insurance (NI) record in order to boost their state pension entitlement has been extended by the government.

The decision means that people with gaps in their NI records, dating back to April 2006, now have more time to decide whether it is worthwhile filling them, to help towards their retirement income.

Financial experts have praised the move as "great news" for customers, saying the government should be "commended for listening to the calls to extend the deadline".

So, how can you make use of the scheme to help boost your final retirement pot?

When has the deadline been extended to?

Ministers have agreed that people will now have until the end of July to take advantage of the government's offer. The deadline for contributions was previously set at April 5 2023.

Why has the deadline been extended?

Downing Street said that customer phonelines have been busy with people trying to make top-ups, and to avoid customers being unable to pay voluntary contributions, for reasons beyond their control, it was changing the deadline.

A written ministerial statement by Financial Secretary to the Treasury Victoria Atkins said: "HMRC [HM Revenue and Customs] and DWP [the Department for Work and Pensions] have experienced a recent surge in customer contact.

"To ensure customers do not miss out, the government intends to extend the April 5 deadline to pay voluntary NICs [national insurance contributions] to July 31 this year.

"This applies to years that would otherwise have been out of time to pay after April 5, up to and including the 2016/17 tax year. All voluntary NICs payments will be accepted at the existing 2022/23 rates until the July 31."

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How does the scheme work?

The government has been allowing people to retrospectively build their April 2006 to April 2016 NI record through voluntary contributions, as part of transitional arrangements introduced alongside the new state pension.

Eligible taxpayers can find out how to check their NI record, obtain a state pension forecast, decide if making a voluntary NI contribution is worthwhile for them and their pension, and how to make a payment on gov.uk.

Those who think they should be entitled to free NI credits - which, for example, may apply if they are a parent of were ill - can also use the site to check their eligibility status.

People can carry out similar checks of their NI record by accessing the HMRC app or a personal tax account.

In general, people need 35 years of qualifying NICs to get the full state pension.

What has been the reaction to the decision?

Sir Steve Webb, a former Liberal Democrat pensions minister who is now a partner at consultants LCP, said: "For most people, paying voluntary NI contributions to deal with a shortfall in their state pension makes excellent financial sense.

"But it is also important to make sure that extra contributions are right in your individual case as sometimes additional contributions may not boost your pension."

Elsewhere, Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said the extension will give customers "the time to make sure they are making the right decision for their circumstances and give more people the opportunity to make a real difference to how much state pension they get".

"Buying voluntary national insurance credits are a great way of boosting your state pension, but it is vital that you check before handing over any money as you may be able to plug these gaps in a different way - by backdating a benefit claim for instance," she added.

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