Extended Deadline for Paying Class 3 NIC Offers Opportunity to Boost State Pension
The government has extended the deadline for taxpayers to fill gaps in their national insurance contribution (NIC) record, allowing them a further 22 months to increase their entitlement to the state pension.
Many individuals only discover they have missing NIC payments when they reach state pension age, potentially leaving them with a reduced pension amount. To receive the maximum state retirement pension, individuals who reached state pension age on or after 6 April 2016 require 35 full years of NIC contributions, with a minimum of 10 years to qualify for any state retirement pension.
Checking the NIC record through the online personal tax account provides an estimate of the state retirement pension and helps identify any deficiencies that may affect other contribution-related state benefits.
The original deadline to fill these gaps was 5 April 2023, but due to difficulties in accessing HMRC's helpline, it was extended to 31 July 2023. However, in a recent statement, the Financial Secretary to the Treasury announced a further extension, allowing eligible taxpayers to fill gaps in their NIC records until 5 April 2025.
The issue of reduced state pension entitlement for parents who chose not to claim child benefit has also been addressed, with retrospective NI credits being made available. Taxpayers can pay voluntary class 3 NIC contributions at the 2022/23 rate of £15.85 per week until 5 April 2025.
Considering factors such as remaining working years, affordability, other pension sources, and life expectancy is crucial when deciding whether to make additional NIC payments to potentially increase future state pension benefits.
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