If you’ve got gaps in your national insurance contributions (NICs) record, then mark 31st July on your calendar. This deadline serves as a reminder for you to consider making voluntary contributions.  

Since the introduction of the new state pension in April 2016, several adjustments have been made to the rules regarding pension entitlement and NICs. Understanding these changes is essential to ensure you make informed decisions about your pension provision. 

The implementation of the new state pension in 2016 brought about significant reforms to state benefits. If you didn’t reach state pension age before April 6th, 2016, it’s crucial to note two important adjustments: 

• Increase in required NICs: The period of NICs, including any credits, necessary to qualify for a full pension was raised from 30 tax years to 35 tax years. 
• Minimum entitlement period: The minimum period for eligibility to receive any pension benefit changed from just one year to ten years. 

These changes had an impact on individuals with contribution records of fewer than ten years, potentially leaving them worse-off. To address this, the government introduced relaxed rules allowing for voluntary NICs to fill in any missing years. Previously, these voluntary contributions could only be made for a maximum of the previous six tax years. However, a temporary extension of the backdating period was implemented, enabling voluntary contributions to cover the years from 2006/07 onwards. Initially scheduled to end on April 5th, 2023, the concessionary payment period was extended to July 31st, 2023, due to increased public awareness and late publicity. 

Benefits of making voluntary contributions  

The extension of the voluntary contributions deadline presents a unique opportunity for you to address any gaps in your NIC records between April 2006 and April 2017. Even if you’ve already reached state pension age, this may be your last chance to fill these gaps. However, it’s important to note that making voluntary contributions may not always be beneficial in every situation. Therefore, seeking advice from a professional before making any payments is highly recommended. We can guide you in making informed decisions based on your individual circumstances. 

Deadline and considerations  

It’s unlikely that there will be any further extension of the voluntary deadline beyond July 31st. It's therefore crucial to take action promptly if you have any outstanding gaps in your NIC record within the specified timeframe.  

Understanding the adjustments to pension entitlement and seeking professional advice are crucial steps in making informed decisions about your pension provision. 

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