HMRC issues deadline for thousands to check state pension entitlement

More than 10,000 payments worth £12.5 million have already been made through the new digital service

Thousands of households are being encouraged to review their state pension entitlement as a crucial deadline looms. With less than six months remaining for individuals to address any gaps in their National Insurance (NI) records, dating back to 2006, to optimise their state pension, the clock is ticking.

HM Revenue and Customs (HMRC) has disclosed that over 10,000 payments totalling £12.5 million have already been processed through the new digital service designed to enhance state pensions since its inception in April. The deadline for people to maximise their state pension by making voluntary contributions to fill any NI record gaps between April 6, 2006, and April 5, 2018, is April 5, 2025.

Typically, individuals can only make voluntary contributions for the previous six tax years, and after next year's April 5 deadline, the standard six-tax year limit will be reinstated. In 2023, the former government extended the deadline for voluntary NI contributions to April 5, 2025, for those impacted by new state pension transitional arrangements, covering tax years from April 6, 2006, to April 5, 2018.

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This extended deadline has provided individuals with additional time to evaluate their options and make their contributions. Men born post-April 6, 1951, and women born after April 6, 1953, are eligible to make voluntary NI contributions to augment their new state pension, reports The Sun.

Some individuals may qualify for NI credits instead of needing to make contributions, so it's essential they check and consider what's best for them.

HMRC has revealed that the majority (51%) of customers using their online service topped up one year of their National Insurance record, with the average online payment being £1,193.

Pensions Minister Emma Reynolds urged: "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."

Alice Haine, personal finance analyst at Bestinvest, advised: "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."

The 'Check your State Pension forecast' page on Gov.uk provides access to this service. It's also available through the HMRC app, which can be downloaded free from the Apple App Store and Google Play Store.