If you’re considering claiming the UK state pension, you need to check your National Insurance (NI) record before 5 April 2023.
Are you eligible?
To be eligible for the maximum ‘new state pension’, you must have at least 35 qualifying years of NI contributions and have retired on or after 6 April 2016.
Even if you don’t have the full 35 years, you may still be eligible for partial payment of the ‘new state pension’ if you have contributed for a minimum of 10 years.
If your NI record started before 6 April 2016, you may need to contribute for more years to reach the required amount.
If you haven’t contributed enough, you may not be able to claim the full state pension when you reach retirement age.
Can you increase your contributions?
You may be able to top up your contributions by making voluntary NI contributions, which can normally only be made for the previous six tax years.
However, there is an extension currently in place which allows you to fill any gaps in your NI contributions history from 6 April 2006. But from 6 April 2023, the timeframe will revert to six years.
Therefore, in the 2023/24 tax year, you will only be able to make contributions going back to the 2017/18 tax year.
When considering making voluntary contributions, you must seek professional financial advice.
When should you review your record? Make sure you review your NI record before 5 April 2023 so that you can detect any gaps in your history
This will also allow you to ensure that your record includes NI contributions paid through PAYE or Self Assessment, as well as NI credits gained.
Having a complete National Insurance record is vital for receiving the full state pension, so if you spot any errors make sure you contact HM Revenue & Customs (HMRC) as soon as possible.
If you need advice on balancing salary and dividends, don’t hesitate to contact us today.
