18th April 2023Reminder: Act now to ensure State Pension eligibility before July deadline

An individual’s eligibility for the UK State Pension is based on the number of ‘qualifying years’ they have on their national insurance records. However, sometimes there can be gaps which limit their eligibility. Emily Carlton, Tax Manager, explains how to benefit from a one-off opportunity from HMRC to address potential gaps and maximise your State Pension eligibility.

Emily explains:

“This is a unique opportunity from HMRC to address potential gaps in your State Pension Record and maximise eligibility for future payments. Individuals often forget that they have short gaps where they were not paying National Insurance contributions, and this can have a big impact when they do get to State Pension qualifying age. We would urge everyone to check this before the July deadline – particularly if you’re close to the State Pension age or if you know you will not be able to get the right number of qualifying years during your working life.”

What counts as a qualifying year?

A qualifying year is typically a year in which:

• You worked and paid national insurance contributions
• You received national insurance credits due to being a parent, a jobseeker or disabled and claiming certain benefits
• You paid voluntary contributions.

A minimum of 10 qualifying years is required to be entitled to the basic State Pension. While 35 qualifying years are required for the full State Pension (currently around £185 a week).

What counts as a potential gap?

Some individuals may find they have gaps in their record, this can be because they were employed, but had low earnings or sometimes unemployed and not claiming benefits. This can also be the case if you were living or working outside of the UK.

What can I do?

Individuals can check their State Pension forecast instantly on their government gateway account. Alternatively, those without a government gateway account can complete a State Pension forecast application and post this to HMRC.

Both records will detail any ‘gaps’ in qualifying years and how many years are required to reach the full entitlement.

Voluntary national insurance contributions can be paid to top up the ‘gaps’ in the record. Typically, you can only go back 6 years to make payments towards any gaps.

However, as a one-off exception, HMRC has extended this 6-year time period to allow voluntary contributions for any ‘gaps’ in the contribution record since 2006.

This extension is only available until 31 July 2023 after which individuals will be again limited by the 6-year rule.

To discuss specific circumstances, please get in touch with a member of the team.