03/03/2023

State Pension changes

The full weekly state pension increases from £185.15 to £203.85 from 06 April 2023. One should have 35 years of full National Insurance (NI) contributions to qualify for a full state pension. Most people would have met that requirement during their working life, but some do not. There may be several reasons for gaps in NI contributions:

  • Employed on low earnings
  • Employed part-time
  • Unemployed and not claiming benefits
  • Self-employed with low profits
  • Full time carer
  • or worked abroad

If you are in one of these groups, fear not; you can still top-up your state pension for the years from 2006/2007 onwards.

Under normal rules, it is only possible to fill gaps in NI records up to six years after the year in question. This means that 2016/17 is the oldest year which could be filled in 2022/23.

For a limited period, people were able to go much further back and fill gaps for any year from 2006/2007 onwards. This transitional period ends on 05 April 2023. For those with gaps in contributions between 2006/2007 and 2016/2017, it is the last call to make it up.

Is it worth it?

The current cost of voluntary Class 3 NI contributions is £15.85 per week or £824.20 per year. That, in return, is worth £5.29 per week or £275 per year. It will take only four years to see a return on your top up. That clearly might be advantageous for many.

Ten years of extra contributions could mean £2,750 a year in payments. That’s £27,500 over ten years and £55,000 over 20 years.

Who should consider to-ups

  • Anyone close to state pension age that doesn’t have enough qualifying years to get the full state pension
  • Anyone who will not be able to get the qualifying years needed to get the full state pension during the working life
  • Self-employed that don’t have to pay Class 2 contributions due to low profits
  • Anyone who lives or lived outside the UK

How do I know If I have gaps in my National Insurance record?

The simplest and quickest way of accessing the National Insurance record is to check online at www.gov.uk/check-state-pension.

You can also:

  • Fill in the BR19 application form and send it by post. (available on www.gov.uk)
  • Call the Future Pension Centre (0800 731 0175), who will post the forecast for you

If you have any questions and would like to discuss them with us, please get in touch.

01733 314553                               info@brookswealth.co.uk                      www.brookswealth.co.uk