Reminder: Bolster your State Pension entitlement by 5 April 2025 deadline
An individual’s entitlement to the new State Pension is dependent on the number of “qualifying years” they have on their National Insurance record. Qualifying years are those in which they either had earnings over a certain level, or received NIC credits, for example because they could not work because of illness or disability.
Qualifying years for State Pension
35 qualifying years will ensure that an individual is entitled to the full State Pension, while 10 years are required to qualify for the minimum level.
A shortfall in qualifying years can arise where individuals have spent time:
- unemployed;
- as a low-earning employee;
- self-employed with low or no profits; or
- living outside of the UK.
Where an individual’s NIC record has years that are not qualifying years, they can voluntarily pay NICs – under either Class 2 or Class 3 depending on their particular circumstances – to fill in any gaps. For the 2024/25 tax year, Class 2 NICs are £3.45 per week, and Class 3 NICs are £17.45 per week, meaning the cost of an additional qualifying year is £179.40 or £907.40.
The normal deadline for paying voluntary NICs is 6 years from the end of the relevant tax year. However, under provisions brought in as part of the introduction of the new State Pension, individuals were given additional time to make voluntary contributions to fill any gaps for the 2006/07 tax year onwards. The deadline for this was initially 5 April 2023 and subsequently extended to 5 April 2025. Until this date, gaps for the earlier years can be filled at the rates applying in those years. It is understood that 5 April 2025 is a hard deadline, after which point, the normal 6-year rule will apply.
If you want to check your National Insurance record and understand if you might need to make voluntary contributions, you can check your online HMRC Personal Tax Account. Please speak to us if you would like to discuss whether you should take any action in advance of the 5 April 2025 deadline. For more information on private client tax issues, click here.
Note: This article was published on 21 March 2023 but subsequently updated on 14 June 2023 to reflect the further extension of the voluntary NIC deadline from 31 July 2023 to 5 April 2025 as announced by the government on 12 June 2023.
