HMRC urges people over 18 in 2006 they have six months to boost State Pension

HM Revenue and Customs (HMRC) has revealed that over 10,000 payments totalling £12.5 million have been processed via the new digital service designed to enhance people's State Pensions, which opened in April. But, individuals have less than six months remaining to address any discrepancies in their National Insurance (NI) records dating back to 2006 to optimise their State Pension upon retirement.

Typically, individuals can only make voluntary contributions for the previous six tax years, and after the deadline of April 5 next year, the standard six-tax year restriction will be reinstated. In 2023, the former government extended the cut-off date for making voluntary NI contributions to April 5, 2025 for those impacted by new State Pension transitional arrangements, encompassing the tax years from April 6, 2006 to April 5, 2018.

This extended deadline has provided individuals with additional time to evaluate their options and make their pension contributions. Men born post-April 6, 1951 and women born post-April 6, 1953 are eligible to make voluntary NI contributions to augment their New State Pension.

READ MORE: DWP urges thousands to take action ahead of benefits being axed

Certain individuals may qualify for NI credits instead of having to make contributions, so they should verify and consider what is best for them, reports the Daily Record. HMRC stated that further scrutiny of the online service usage indicates that the majority (51%) of customers topped up one year of their NI record, with the average online payment amounting to £1,193.

Pensions Minister Emma Reynolds has urged the nation's pensioners to take action, stating: "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."

People can find out more about making voluntary contributions on GOV.UK here. People of working age can also check their State Pension forecast on GOV.UK here.

Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, offers some insightful advice on the pension situation: "People typically need at least 10 qualifying years of NI (national insurance) contributions to receive any state pension at all and at least 35 years to receive the full new state pension - though they don't need to be consecutive years."

She also provides a word of caution about addressing gaps in National Insurance records: "Plugging gaps can be quite an expensive process, so it is important to assess whether you actually need to buy back any missing years. This will depend on how many more years you plan to work, and whether you are eligible for NI tax credits, which fill the gaps, such as those who have been sick, were unemployed or took time out to raise a family or care for elderly relations.

"Plugging gaps in your record is relatively straightforward since the Government rolled out its new NI payments services in April this year - a State Pension forecast tool that has been checked by 3.7m since its launch.

"People simply need to log into their personal tax account or the HMRC app to not only view any payment gaps but also check if they can plug those gaps directly through the Government's digital channels.

"A short survey assesses the person's suitability to pay online with those eligible to pay directly given a series of options to plug any gaps depending on when someone wants to stop working.

"Calculating whether to top up can be confusing though and ultimately there is no point paying for more years than you need because you won't get that money back.

"People who might need to top up include those that took a career break as well as low earners or expatriates living and working abroad.

"Remember, this deadline has been extended a couple of times in the past, which makes it more likely the Government will stick to the April cut-off point this time around. For this reason, those that think they might need to take action should start the process now."