The Department for Work and Pensions (DWP) and HM Revenue and Customs (HMRC) have issued a warning ahead of a significant state pension deadline next year. The cut-off to fill in the gaps in your National Insurance record is April 5 next year, with both DWP and HMRC expecting a surge in demand for their services in the lead-up.
Under current rules, you need 35 qualifying years on your National Insurance record – some people may need more – to claim the full new state pension. You typically need 10 years to receive anything at all.
If your record has gaps, you could receive much less than you anticipated, but you can make voluntary contributions to fill them. The original deadline was April 5, 2023, but this was extended once until July 2023 and then until April 2025 after a public awareness campaign, led by MoneySavingExpert.com founder Martin Lewis, overwhelmed phone lines to the Future Pension Centre.
Currently, you can buy back missing National Insurance years dating back to 2006, but after the deadline, you will only be able to go back six tax years. So if you miss the deadline, you could see your state pension payments reduced.
With just a few months left until this happens, HMRC and the DWP are preparing for heavy usage of their services, according to exchequer secretary to the Treasury, James Murray, reports the Mirror.
Earlier this month, Liberal Democrat MP Freddie van Mierlo questioned the Treasury about their plans to reduce delays in topping up National Insurance records and the “complexities in obtaining the necessary information to purchase additional years of National Insurance contributions.”
In response, Mr Murray stated: “Both departments are putting in place measures to manage the expected demand in the run-up to the 5 April 2025 deadline, including managing the deployment of resources, the use of callbacks, digitising and improving forms for overseas individuals, interactive voice response messaging and directing customers to the digital service.”
He also mentioned that the Future Pension Centre and National Insurance helpline would continue to be available for customers who cannot use online services, adding: “as well as customers who prefer that route or who need additional assistance,” Earlier this year, the DWP and HMRC introduced a joint online service that enables you to check your state pension forecast and buy contributions for the years you need them. Prior to this, to fill in gaps in your record, you had to make two calls to check for gaps and then make payments for any required top-ups.
Initially, you had to contact the Future Pension Centre at the DWP to discuss which years you could top up, how much it would cost, and what impact it would have on your pension. Then, you had to phone HMRC to get an 18-digit reference number for the payment to be made.
Britons were previously left frustrated by an often labelled “tedious” and “unusable” system, with daunting phone queues becoming a common obstacle. Completing the process was just part of the battle, as individuals then had to await the DWP’s update of their National Insurance record to review their state pension status or forecast.
The launch of a digital service now allows users to hop online using their Personal Tax Account credentials. Those without an HMRC account can easily set one up on GOV.UK. Yet, this new tool comes with limitations; it’s not applicable for those who have already initiated their state pension claims or need to close gaps caused by self-employment or overseas work.
Gearing up before the April deadline could be wise to amend any discrepancies in your records efficiently.
