By Tegan Gladman, Financial Designer Support with Anstee & Co.
You may have heard in the news recently that there is a deadline to top up your state pension. But what does this mean?
How does this affect me?
In April 2016, the new State Pension was introduced. Under the new rules, you need 35 qualifying years to receive the full state pension – currently paying £185.15 per week. If you do not have 35 qualifying years on your NI Record, your state pension will be reduced proportionally.
Since then, there has been a transitional arrangement in place that allows you to purchase any missing years between 2006 and 2016. The deadline for this arrangement was previously set to 5th April 2023, however, this has been extended to the 31st July 2023. After this deadline, you can still top up your previous missing years, but you can only go back for the previous six years (up to 2017).
This offer could be beneficial to individuals who have gaps in their employment, had lower earnings or worked abroad between 2006 and 2016. To top up one full qualifying year via voluntary NI contributions (Class 3), the current rate is £15.85 per week (£824.20 per year). Based on the current full state pension, this contribution would top up your state pension by £5.29 per week (£275.08 per year). Based on this, you would need to live a further three years after the state pension age to receive your money back.
How to find out more about your state pension.
To find out whether you could benefit from plugging any gaps in your NI record, you can request a state pension forecast/NI Record via your Government Gateway login on the links below. This will give you a forecast, and it will show you what years are missing and are available to top up.
- If you are pre-state pension age- https://www.gov.uk/check-state-pension
- If you are post-state pension age – https://www.gov.uk/check-national-insurance-record
Once you have checked this, there is a specialist team called the Future Pension Centre who will give you personalised information on your situation, and confirm whether you would benefit from topping up any previous years. They will also explain how to do this. Their contact details are on the below link:
Do I have any other options?
If you miss out on this, please note that you should still have another opportunity to top up any missing years. Currently, when you are nearing state pension age, the Department for Work and Pensions write to you and gives you the option to top up the state pension with a lump sum payment. However, please note, there is no guarantee they will still be doing this when you reach state pension age.
How Anstee & Co. can help to plan your retirement.
At Anstee & Co we are independent financial advisers (IFA’s). This means that we offer unbiased advice. We will look at all the financial options. Some financial advisers only operate from a limited panel or only sell their products and services. Why not arrange a meeting with us today? The initial “getting to know you” meeting is at our expense and is without obligations. The idea behind the meeting is to see how we work and how we can help you. It is about building relationships.
Our expertise covers all aspects of financial planning including pensions, investments, and mortgages.
If you have any thoughts or comments on this article, “Should you top up your State Pension?”, then it would be great to hear your views.
Finally, the information contained in this article is for information purposes only and does not constitute financial advice. No action should be taken based on this information alone. Anstee & Co is authorised and regulated by the Financial Conduct Authority (FCA).
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