The Department for Work and Pensions has been overwhelmed by demand as workers scramble to plug gaps in their pensions ahead of the original April 5 deadline.
Experts have urged the public to pay voluntary National Insurance (NI) contributions in the months leading up to the deadline in order to receive a better state pension when they retire, but with the deadline just weeks away, many have been able to do so don’t phone lines. The DWP has now moved to reassure the public, saying: “If customers are unable to make voluntary contributions by May 5th for reasons beyond their control,
To get the full new state pension of £203.85 a week from April you need to have at least 35 years of contributions in your account and Martin Lewis says paying voluntary contributory causes could prove “incredibly lucrative” for 45-70 year olds . “Many can spend £800 or less (on contributions) and get back £5,500,” he said.
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Buying back missed years can be a good way to boost retirement income, as the full new state pension will be worth up to £10,600.20 in FY2023/24 – paid out every four weeks at £203.85, according to Chronicle Live.
People can fill any NI gaps in their records going back to 2006, but after April 5th you can only go back six years. According to the PA news agency, while efforts should still be made to make voluntary contributions by April 5, the DWP will “take a sympathetic approach and consider accepting payments received after the deadline”.
The new state pension was introduced on April 6, 2016, but many people are missing social security years. Here’s everything you need to know about the scheme:
You may have gaps or partial years in your NI dataset for a number of reasons such as: For example, if you were a low earner and did not pay NI, or if you were unemployed but did not claim benefits. Self-employed people or people working abroad can also have gaps.
How to check if you are missing NI years
You can check your state pension overview on Gov.uk. Simply enter your data and you will find out whether your pension is likely to reach the full statutory pension amount. You can also check your social security card on Gov.uk.
Check if you are entitled to free social security credits
You may be able to make up for missed years free of charge, e.g. B. you had childcare duties as a carer or an illness made you temporarily unable to work. Check the National Insurance Credits section of Gov.uk
You can buy more years if you need them
If you can’t make up for your missing years for free, you can buy them. The standard cost of buying social security contributions is £15.85 for a week of missing contributions in tax year 2022-23. It would cost you £824.20 for a full year.
However, if you wish to fill in gaps that have arisen in the last two tax years, you would pay the rate from those years. Voluntary contributions to gaps in 2021-22 cost £15.40 per week; for gaps in 2020-21 the cost is £15.30 per week. For those who can fill in gaps between 2006 and 2016 the cost is £15.40 for a week.
Find out how to pay here.
How many NI contribution years are required for a full pension?
You now need 35 years of NI contributions to qualify for the full state pension, which equates to £185.15 a week in 2022-23. In order to be entitled to a statutory pension at all, one needs 10 years of contributions.