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Those who are planning to claim a UK state pension should check their national insurance (NI) record before 5 April 2023, as the current allowance of voluntary contributions will be curtailed from April.
A person must have 35 qualifying years of NI contributions in order to qualify for the maximum ‘new state pension’ (received by those retiring on or after 6 April 2016). To qualify for part payment, a person must have contributed for at least 10 years, though different rules may apply for those whose NI record started before 6 April 2016. Currently there is an extension in place which allows individuals to fill gaps in their NI history from April 6th, 2006, to the present date, by making voluntary contributions. From April 6th 2023, this timeframe will revert back to the normal six years, so it will be possible to make contributions going back to the 2017/18 tax year only.
Individuals should take this opportunity to check their NI record to identify any shortfalls in their NI history, check that their record includes NI contributions paid through PAYE, self-assessment, and NI credits, and contact HMRC to have any errors corrected. It may be beneficial to make voluntary NI contributions at this time, potentially increasing the amount of state pension received.
The ICAEW has provided a useful list of actions for taxpayers to take before 5 April 2023 and a short webinar which explains these changes:
Check your national insurance record before 5 April 2023 | ICAEW
Specific financial advice is recommended when deciding to make voluntary NI contributions.
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