The clock is ticking for those looking to enhance their State Pension benefits, with a crucial deadline looming on 5 April 2025.
After this date, changes will restrict your ability to address any deficits in your National Insurance contributions (NICs) that date back further than six years.
Why Your National Insurance contributions matter
The amount you receive as a State Pension depends greatly on your NI record.
Currently, any shortcomings in your contributions can still be amended, allowing you to claim the full State Pension.
However, this opportunity extends only until the deadline, enabling contributions dating as far back as 6 April 2006 to be addressed.
Missing this window means you could permanently miss out on increasing your pension.
Upcoming increases to the State Pension
The State Pension is set to rise by 4.1 per cent from April 2025, under the Government’s triple lock system.
This means that those who have optimised their NI records will see a notable increase in their pension income. Here are the expected rates post-increase:
- New State Pension (post-April 2016 retirees) – £230.25 weekly (an increase from £221.20)
- Old Basic State Pension (pre-April 2016 retirees) – £176.45 weekly (an increase from £169.50)
Utilisation of digital services
The Government’s digital services have seen substantial use, with over 37,000 individuals topping up their NI records through the platform.
This activity has added a staggering 68,673 years cumulatively to users’ records, equating to an anticipated extra £35 million in future pensions.
With the deadline nearing, what can you do to make sure you have filled in any gaps in your NI record?
- Review NICs – Access your Personal Tax Account on the Government’s website to view your current NI record.
- Consider voluntary contributions – If there are gaps, topping them up might be more cost-effective than you think, especially with the potential increase in pension income.
- Seek expert advice – Make the most informed decision, consider speaking with our team who can provide personalised advice for your financial situation.
This window to strengthen your retirement income won’t stay open long.
For those interested in understanding more about their NI contributions or exploring their State Pension options, our team of accounting specialists is ready to assist. Contact us today.