COVENTRY MESSAGE BOARD

HMRC has warned people that time is running out for DWP state pensioners to boost their state pension before the deadline



HMRC has issued a warning that state pensioners could miss out on a valuable boost to their pension if they don't take action before the looming deadline. The tax authority is alerting those receiving Department for Work and Pensions (DWP) state pensions that the window for filling National Insurance (NI) record gaps dating from 2006 is closing fast, with under three months left.

The DWP has revealed more than 10,000 payments totalling £12.5 million have been processed through a new digital facility designed to augment individuals' State Pensions since its introduction last year. In a move by the prior administration in 2023, the cut-off for voluntary NI contributions was extended until April 5, 2025.

This applies to individuals affected by new State Pension transition rules, targeting tax years from April 6, 2006, up to April 5, 2018.

Evelyn Partners' personal finance analyst Alice Haine, who works for the company operating Bestinvest, commented on the intricacies of pension entitlement: "People typically need at least 10 qualifying years of NI (national insurance) contributions to receive any state pension at all and at least 35 years to receive the full new State Pension - though they don't need to be consecutive years."

She went on to advise caution when considering making additional NI contributions: "Plugging gaps can be quite an expensive process, so it is important to assess whether you actually need to buy back any missing years. This will depend on how many more years you plan to work, and whether you are eligible for NI tax credits, which fill the gaps, such as those who have been sick, were unemployed or took time out to raise a family or care for elderly relations.", reports Birmingham Live.

Ms Haine advised: "People simply need to log into their personal tax account or the HMRC app to not only view any payment gaps but also check if they can plug those gaps directly through the Government's digital channels. A short survey assesses the person's suitability to pay online with those eligible to pay directly given a series of options to plug any gaps depending on when someone wants to stop working."

She warned that calculating whether to top up can be tricky, noting: "Calculating whether to top up can be confusing though, and ultimately, there is no point paying for more years than you need because you won't get that money back."

She further explained: "People who might need to top up include those that took a career break as well as low earners or expatriates living and working abroad."

Additionally, she highlighted the importance of the deadline, saying: "Remember, this deadline has been extended a couple of times in the past, which makes it more likely the Government will stick to the April cut-off point this time around. For this reason, those that think they might need to take action should start the process now."