Most people need 35 qualifying years on their National Insurance record to claim the full new state pension – and time is running out to fill any gaps you may have
An important deadline which could affect how much money you have in retirement is fast approaching.
You’ve only got until July 31 to buy any missing National Insurance (NI) years dating back from 2006 to 2016.
This is important, as most people need 35 qualifying years on their NI record to claim the full new state pension.
If you have less years than this, your state pension will be smaller – and you usually need ten years to get anything at all.
The full new state pension is currently worth £203.85 per week and the state pension age is 66, although it is rising to 67 and eventually 68.
You’ll claim the new state pension if you were born on or after April 6, 1951, if you are a man and after April 6, 1953, if you are a woman.
If you were born before these dates it means you will get the basic state pension instead and this deadline doesn’t affect you.
Martin Lewis ’ MoneySavingExpert.com website recommends anyone aged between 45 and 70 should check their NI record now to see if they have any gaps to fill.
After the July 31 deadline, you’ll only be able to go back six tax years.
If you do need to plug any gaps in your record, most people who are employed will need to buy class 3 NI contributions.
For each full year of class 3 NI contributions you buy, from 2006/07, up to and including 2019/20, it will cost you £824.20.
The rate is slightly less for the following tax years – the rate for 2020/21 is £795.60, and for 2021/22 you’ll pay £800.80.
Each year you buy then adds £275 a year to your state pension.
If you’re self-employed, or you live and work abroad, you may need to purchase class 2 NI contributions to top up your record, or class 3 if you’ve retired abroad.
To check if there are any gaps in your NI record, you can use the Gov.uk state pension forecast calculator.
This will tell you if you’re expected to retire on a full new state pension, or if you’re likely to have a shortfall.
But before you go buying NI contributions, you should also see if you’re able to plug any NI gaps for free.
For example, you may be entitled to NI credits if you were claiming statutory sick pay and not earning enough for a qualifying year.
Those who claim benefits such as Jobseeker’s Allowance and Employment and Support Allowance may also qualify for NI credits.
There are more examples of ways you may be eligible for NI credits on the Gov.uk website.
You also need to check if the gains from buying extra years may be reduced if it pushes you into the higher 40% tax bracket.
Contact the free Future Pension Centre on 0800 731 0175 before buying any NI contributions to check if you’d benefit from plugging any gaps in your NI record.
If you’re already at state pension age, contact the free Pension Service helpline on 0800 731 0469.
