IN A bid to help Scots boost their State Pension when they retire, HM Revenue and Customs (HMRC) launched a digital service back in April which lets people check if they have gaps in their National Insurance (NI) record.
The service then calculates if making a payment would increase the person’s State Pension, and then allows them to a payment if they wish to do so.
Plugging the gaps in your NI history can boost your State Pension[/caption]
And over the last seven months, it has already made 10,000 payments worth £12.5million.
Scots only have six months left to fill out any gaps in the records as far back as 2006 – after the April 2025 deadline, people will only be able to make voluntary contributions for the previous six tax years.
A person may have a gap in their NI record if they had a period of time on a low income, were unemployed but didn’t claim benefits, were self-employed but did not pay contributions because of small profits or lived abroad.
To be able to make voluntary contributions to your State Pension, men have to be born after April 6, 1951, and women need to be born after April 6, 1953.
However, some people may be entitled to NI credits instead of making payment contributions, so everyone has been urged to consider what option is the best for them.
HMRC has also revealed that 51 per cent of customers boosted one year of their NI record, with the average online payment being £1,193.
We want pensioners to enjoy the dignity and support they deserve in retirement… I urge everyone to check if they could benefit by filling gaps
Emma Reynolds
Emma Reynolds, Minister for Pensions, said: “We want pensioners of today and tomorrow to enjoy the dignity and support they deserve in retirement.
“That’s why I urge everyone to check if they could benefit by filling gaps before the deadline passes.
“Using our online tool means only a few clicks could make a huge difference to your future.”
At the moment, the age of retirement in Scotland for everyone is 66, however, this is set to rise to 67 sometime between 2026 and 2028.
So experts have now shared other ways that Scots can boost their State Pension payments – and it works even if you are already of retirement age.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown told the Daily Record: “There are things you can do to plug the gaps, including checking to see if you were entitled to claim a benefit (such as Child Benefit) which comes with a National Insurance credit during that time, and seeing if you can backdate a claim.
“You can also buy voluntary National Insurance credits, which can work out very good value.
“Generally, you can purchase credits to plug gaps going back six tax years but if you’re a man born after 5 April 1951, or a woman born after 5 April 1953 you can currently plug gaps in your National Insurance record going back to 2006.”
Check your State Pension forecast
Before you make any payments or contributions, the first thing to do is check your State Pension forecast.
Scots can get a forecast online from the service, which provides personalised information such as your State Pension age and an estimate of how much State Pension you may get at that point.
It will also reveal if you can increase this amount whilst also allowing you to view our NI contribution history.
You can check your State Pension forecast on the GOV.UK website here.
How does the state pension work?
AT the moment the current state pension is paid to both men and women from age 66 – but it’s due to rise to 67 by 2028 and 68 by 2046.
The state pension is a recurring payment from the government most Brits start getting when they reach State Pension age.
But not everyone gets the same amount, and you are awarded depending on your National Insurance record.
For most pensioners, it forms only part of their retirement income, as they could have other pots from a workplace pension, earning and savings.
The new state pension is based on people’s National Insurance records.
Workers must have 35 qualifying years of National Insurance to get the maximum amount of the new state pension.
You earn National Insurance qualifying years through work, or by getting credits, for instance when you are looking after children and claiming child benefit.
If you have gaps, you can top up your record by paying in voluntary National Insurance contributions.
To get the old, full basic state pension, you will need 30 years of contributions or credits.
You will need at least 10 years on your NI record to get any state pension.
Specified Adult Childcare Credit
Anyone who is under State Pension age and looks after a young family member could be entitled to National Insurance credits.
To qualify, you need to look after a family member who is under the age of 12 while the parent or main carer is working.
This works under the Specified Adult Childcare Credit, and the working parent would pass their NI credit to you.
There are also other situations where you could claim NI credits, even if you are receiving benefits.
For example, you could still be entitled to them if you are off work on Statutory Sick Pay.
More information on this can be found here.
Working past State Pension age
People who are fit enough can decide to keep working after they reach State Pension age.
Anyone who opts to do this doesn’t have to pay any National Insurance contributions.
For example, an average earner who decides to retire at 65 instead of 55 could boost their State Pension by 60 per cent.
Scots now have more choices about when and how they can retire as there is no longer a fixed retirement age.
Employees now have the right to request to work flexibly and have it seriously considered by their employer.
How can I claim Sate Pension?
YOU will not get your new State Pension automatically – you have to claim it.
You’ll need:
- the date of your most recent marriage, civil partnership or divorce
- the dates of any time spent living or working abroad
- your bank or building society details
- any social security numbers that you have for foreign state pension schemes
If you’re applying online, you’ll also need the invitation code from the letter about getting your State Pension.
If you have not received an invitation letter but you are within 3 months of reaching your State Pension age, you can request an invitation code.
If you reach State Pension age in the next four months, you can phone the Pension Service to claim. Or you can phone the Pension Service to get a claim form posted to you.
After you apply, you must tell the Pension Service if your circumstances change.
Buy National Insurance credits
If you are worried about your State Pension and have some spare cash, you can buy voluntary class 3 NI contributions.
These can help fill any gaps in your NI record.
If you want to buy a full extra year, then it can cost around £800 – however, partial years will be cheaper than this.
You would get 1/35th of a year’s State pension for each year that you buy.
This means that within three years you could actually earn your money back.
However, Scots are being urged to check with the DWP before paying for any credits.
