DWP relaxes six-year rule for state pension top-ups – what it means for you

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The government’s Future Pension Center said anyone who reached statutory retirement age after April 2016 will be able to purchase National Insurance credits for missing years dating back to April 2006.

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Both men and women will be able to top up their state pension, even if they are retired, under relaxed rules from this month.

The Department for Work and Pensions (DWP) has suspended the six-year deadline for completing missing National Insurance qualifying years – which helps boost your retirement income up to full state pension.

The government’s Future Pension Center said anyone who reached statutory retirement age after April 2016 will be able to purchase National Insurance credits for missing years dating back to April 2006.

This means that a man born after April 5, 1951 or a woman born after April 5, 1953 can increase her state pension by paying voluntary national insurance contributions since April 2006.

The relaxed rules apply until April 5, 2023, when the six-year deadline will come back into force.







Men born after April 5, 1951 or women born after April 5, 1953 can now increase their state pension by paying voluntary national insurance contributions since April 2006
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Helen Morrissey, senior pensions and retirement analyst, at Hargreaves Lansdown, told the Mirror: ‘Making voluntary national insurance contributions is a great opportunity for people to fill gaps in their state pension record. and increase the amount they receive in retirement.

“A lot of people will have these gaps if they were unemployed or didn’t earn enough to get a national insurance credit and being able to top up their pension this way is very cost effective and a good option for a lot of people. Only the fact of Being able to go back six years can be frustrating, so the ability to reload all the way back to 2006 is extremely useful for those who can benefit from it.”

State pension supplements allow those with a deficit in their state pension to increase their payments.

To get full pension you need 35 years qualifying on your national insurance record, if there are gaps you will be paid a lower weekly amount.

However, by purchasing voluntary NI contributions you can fill any gaps over the 35 years, meaning you have the option of increasing your pension up to the full amount of £185.10.

Of course, it’s only worth it if you have gaps in your pension, you don’t need to buy additional credits if you’re already receiving the full amount because your pension won’t increase any further.

You can also make voluntary contributions if you live abroad, whether you work or not.

The only requirement is that you have already lived in the UK for at least three consecutive years or paid at least three years of NI contributions.

It currently costs £824.20 to buy a year of National Insurance Credits (assuming you pay Class 3 NI).

This would add £275 a year to your state pension. So it will take three years to get your money back.

If you plan to claim the state pension for the next three years or more and your payments are insufficient, it is worth making the voluntary contribution.

But be aware of the risks, as increasing your state pension can sometimes mean you get a reduced pension credit or pay higher taxes if your income moves into the next tax bracket.

If you’re self-employed, you’ll pay £3.15 a week National Insurance Tax on your contribution – or £15.85 on the top bracket.

Before making voluntary contributions to the NI, you should check your NI record to see if there are any gaps in your record and get a pension forecast.

Talk to the Future Pension Center about this, as they will be able to assess whether it is worth making a top-up.

You can contact the government’s Future Pension Center here.

If you are not yet retired, you may be able to apply for supplements by caring for your grandchildren or caring for a loved one, see how here.

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