Just a couple of weeks left to boost state pension

People are being urged to check for gaps in their National Insurance records to see if they need to boost their state pension.

Those who wish to make voluntary contributions have until the 5^th of April to do so.

People are able to make contributions to cover any gaps in their National Insurance records dating back as far as the 2006/07 tax year up until 2018/19, to help boost their entitlement to the new state pension.

The Low Incomes Tax Reform Group (LITRG) is reminding people to check for gaps and to also look for any potential tax and benefit implications that might arise from any increased state pension entitlement.

Antonia Stokes, LITRG Interim Senior Manager, said, “If you have gaps in your National Insurance record, it can potentially make a big difference to the amount of state pension you receive now or in the future.

“Usually, voluntary National Insurance contributions can only be made for the previous six tax years, but as part of the transition to the new state pension which began in 2016, the government has extended this window for plugging older gaps in a person’s National Insurance record.

“The easiest way to find out if you have a gap in your National Insurance record and how much it might cost to plug it is to check your online tax account on GOV.UK or contact the DWP.

“It won’t always be necessary or worthwhile to fill historic gaps, particularly if you already have sufficient years, or are still a long way off state pension age and are likely to continue building up qualifying years. If you are unsure, it is a good idea to speak to the DWP to fully understand your options before you go ahead with a payment. Use the DWP call back request form if you are struggling to get through to them.

“Finally, if you are considering making a payment of voluntary contributions, check the tax and benefits interactions, particularly if you are already claiming your new state pension. A higher state pension may mean more tax to pay and/or less means tested benefits.

“Current state pension claimants should also check that any updated state pension entitlement is accurately reflected for tax purposes, for example in any PAYE coding notices, or tax calculations you receive from HMRC.

“Do this as soon as you receive any increased award to prevent any nasty surprises in the future.”

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.