Hundreds of thousands of mothers have been warned they could be “wasting their money” ahead of a crucial deadline to top-up your state pension. The deadline involves plugging gaps in your National Insurance record if you’re currently not on track to receive the full level of state pension.
At the moment, you can buy missing National Insurance years dating back to 2006 – but after April 5, you will only be able to go back six tax years. Your state pension entitlement is depending on how much years of National Insurance contributions you’ve accumulated.
You normally build up National Insurance contributions by working – but there are also incidences where you may have been entitled to National Insurance credits. LCP Partner and former Pensions Minister Steve Webb has warned how thousands of parents may not have been aware that they could claim National Insurance credits even if they decided not to claim Child Benefit.
Many families decided not to claim Child Benefit because of the High Income Child Benefit Charge, which is a tax charge that sees your Child Benefit start to be tapered away when one parent earns over £60,000 a year, previously £50,000. In response, thousands of couples decided that it would no longer be worthwhile to claim Child Benefit – but this has meant non-working parents missed out on National Insurance credits.
Sir Steve said there is a box on your Child Benefit claim form that you can tick to receive just the National Insurance credits – but many parents are unaware of this option. The Government has announced plans to create a new category of National Insurance credit aimed as those who didn’t claim Child Benefit despite being entitled to it – but this won’t be ready until April 2026.
Sir Steve says this could mean couples, mostly mothers, may waste money paying for National Insurance contributions ahead of the state pension top-up deadline. He has now urged the Government to provide clarity on who will be entitled to these new credits.
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Sir Steve said: “It is good news that the Government has now confirmed it will press ahead with plans to create a new category of NI credits for parents who opted out of Child Benefit because of the High Income charge. But it also means that parents who were thinking of paying voluntary NI contributions before the 5th April deadline might need to think again, as they are at risk of wasting their money.
“It would be helpful if the Government set out – as a matter of urgency – precisely who will be entitled to these new credits so that parents know whether or not there is any point making voluntary contributions for these years.”
Most people need 35 qualifying years on their National Insurance record to get the full new state pension, and ten years to receive anything at all. For the old state pension, you normally need 30 qualifying years if you’re a man who was born between 1945 and 1951, or 44 qualifying years if you’re a man who was born before 1945.
If you’re a woman, you usually need 30 qualifying years if you were born between 1950 and 1953, or 39 qualifying years if were born before 1950. The full new state pension is worth £221.20 a week, and the full basic state pension is £169.50 per week. The latest data from HMRC shows that 37,000 people have topped up more than 68,000 years worth of National Insurance contributions, worth £35million, since last April.
It normally costs £824 to buy a missing National Insurance year and this adds up to £328 each year to your pre-tax state pension. If you’re missing partial years, it will cost you less. If you think you may be missing National Insurance years, you should check your state pension forecast on GOV.UK.
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