HMRC "softens" National Insurance deadline of April 5th for state pension top-up

Those who wish to backdate their National Insurance record to April 2006 must still move swiftly despite some changes made in advance of the state pension top-up deadline on April 5

The deadline to complete any gaps in your National Insurance (NI) record that have existed since April 2006 and to submit additional credits that could increase your state pension has been loosened by HMRC.

People can make a claim as long as they submit an online callback request by the deadline of April 5th, according to the tax department.

Together, thousands of people have already spent millions of pounds purchasing National Insurance credits to increase their eligibility for a state pension.

HMRC has stated that it may be possible to increase your state pension, possibly months after the deadline, despite the fact that time is running out and phone lines are lengthy. The catch is that you have until April 5th to use the government website to request a callback.

The voluntary NI contributions will then be paid after you have been contacted by the Department for Work and Pensions (DWP).

The government has granted a special concession that allows people to claim back to between April 2006 and April 2018, even though normally you can only fill in gaps in NI contributions for the previous six years. It implies that you could receive thousands of pounds more in state pension.

Originally scheduled to expire in April 2023, the allowance was postponed to July 2023 and then again to April 5, 2025, as the DWP was unable to handle demand and its phone lines became congested.

Therefore, starting on April 6, 2025, you will only be able to make voluntary NI contributions for the preceding six tax years unless you submit a callback request in advance.

"After the chaos in the run-up to previous deadlines, it is good the government has planned ahead to ensure that people do not miss out simply because they cannot get through on official phone lines to discuss state pension top-ups," says Steve Webb, a former pensions minister and partner at pension consultants LCP, in response to HMRC's "softening of the 5 April deadline."

For many, he continues, a state pension top-up will be "excellent value, but it is useful to be able to discuss your options with someone who can see your NI record and in particular highlight if topping up some years would be of little or no value."

People can now purchase additional NI credits online, eliminating the need to wait on hold when calling the DWP, thanks to a digital service that HMRC introduced last year. The app does not, however, cover every scenario, so some users may prefer to call instead.

Since its launch, the service has processed over 37,000 payments totaling £35 million, according to the taxman, and 3 point 7 million people have used the GOV online checking tool. UK to see their state pension projection.

HMRC reports that approximately 50% of online users made an average online payment of 1,835 to top up one year of their NI record.

113.76 was the biggest weekly increase in the state pension that was achieved by buying additional NI credits.

The chartered financial planner Rosie Hooper of the wealth management firm Quilter Cheviot stated: "The extent of participation underscores the significance of this program, especially considering that starting in April 2025, people will only be able to retroactively deduct contributions by the customary six-year period.

As a result, many people who might otherwise lose out on thousands of pounds in state pension entitlement have a limited amount of time to act.

HMRC is "softening" the deadline of April 5th in what way?

"Long wait times" are being caused by the "high number of calls" to the DWP's helpline due to the impending deadline of April 5th, according to the Future Pension Centre.

HMRC revealed a new online tool on February 28th for those who can't reach the DWP phone line.

People who want to fill in the gaps in their state pension between 2006 and 2018 by making voluntary National Insurance contributions can do so by completing the online callback request form. The Contact the Future Pension Centre website has the form.

To discuss the payment of voluntary National Insurance contributions, the DWP will call you back. This usually occurs eight weeks after the request is submitted.

Contacting the DWP or HMRC again is not necessary.

According to HMRC: "Voluntary National Insurance contributions made up to April 6, 2006, can still be made after the deadline has passed if a request is submitted to DWP by the deadline of April 5, 2025.

"A notification will show on the user's screen after submitting a request to confirm that the DWP Pension Center has received it. It is advised to take a screenshot of the confirmation message.

While it would be preferable if people could just call ahead of time and get through, Webb described the announcement as a "surprise development" and added, "At least there is now the reassurance that those who try to make contact before the deadline will still be able to make payments after the deadline has passed."

In order to receive your state pension, should you purchase additional National Insurance credits?

To receive the full amount of the new state pension, you must have made NI contributions for at least 35 years.

Taking a break from your career or taking time off to care for elderly family members or children can make things difficult.

You can "buy extra years" by purchasing NI credits, which will increase your state pension.

Filling in any additional gaps in your record now might be worthwhile because you will only be able to claim back six years of NI credits after the deadline of April 5, 2025.

They currently charge 15.85 per week, or 824.20 for a full historic gap year, to those who want to pay for prior years.

This usually adds just over £300 annually, or one-third of the full state pension rate.

In a 20-year retirement, the wealth manager Quilter calculated that a person with 10 years to make up could pay slightly more than 8,000 to receive an estimated additional 55,000 in pension income.

"The potential long-term benefits are significant for individuals with multiple gaps in their NI records," says Kirsty Anderson, Quilter's retirement specialist.

"After retirement, even a single year's worth of top-up would be recovered in a few years.

According to Ross Lacey, director of Fairview Financial Management, "It's worthwhile for everyone to look at their estimated state pension and, if it doesn't seem likely that they'll have the maximum available, to do some research and ask about topping up or paying for part years," he continues.

Typically, it takes three years after receiving your state pension to "repay" the cost of purchasing the additional years.

For some people, topping up won't work.

Plugging gaps can be a costly process, so it's crucial to determine whether you really need to buy back any years that are missing, according to Alice Haine, personal finance analyst at the investment service Bestinvest.

"How many more years you intend to work and whether you qualify for NI tax credits, which cover the gaps, like those who have been ill, were unemployed, or took time off to raise a family or care for elderly relatives," she says.

How you can increase your state pension.

Prior to April 2023, the only method to buy additional NI credits was to call the DWP's Future Pension Centre to learn about filling gaps and then call HMRC to obtain a "code" to ensure their payment was distributed correctly.

But a lot of this can now be done online.

To find out how much you are entitled to based on your age and whether there are any NI gaps that you can close, use HMRC's state pension forecast tool.

You can also check your National Insurance record on the HMRC app, where you can complete a survey to determine whether you are eligible to pay online, or through your Personal Tax Account.

It can be difficult to determine whether to top up, and in the end, there's no use in paying for more years than necessary because you won't receive your money back, Haine continues.

Calling the government's Future Pension Service to confirm how many years they can purchase and whether voluntary contributions will actually increase their state pension may be crucial for some people because of this.

In what amount is the state pension valued?

The weekly value of the full new state pension is 221.20, or 11,502 annually. For men born after 1951 and women born after 1953 with at least 35 years of NI contributions, this is paid.

Because of the triple lock, the state pension will increase by 40.1 percent in April to 230.30 per week (11,975 annually).