DWP State Pension warning with just five weeks to act

With the deadline fast approaching, Brits are being encouraged to act quickly to enhance their state pension. After 5 April 2025, the option to backdate National Insurance contributions will be significantly reduced, allowing individuals to fill gaps only going back six tax years instead of the current 17.

For many, addressing these gaps could substantially increase the state pension they receive upon retirement. The latest figures (August 2024) indicate that over 1.1 million people are currently receiving less than £200 per week from their state pension. However, starting in April, the full new state pension is set to increase to £230.25 per week.

Helen Morrissey, Head of Retirement Analysis at Hargreaves Lansdown, emphasised the urgency: "The clock is ticking for people to take advantage of the opportunity to plug gaps in their state pension record going back to 2006."

She warned: "In less than six weeks, the window will slam shut, and after that, you can only go back six tax years. With more than a million pensioners receiving less than £200 per week, this is a chance that could have a real impact on your retirement income."

Who stands to gain?

If you were born after 5 April 1951 (men) or after 5 April 1953 (women), you're eligible to backdate your National Insurance contributions to 2006, which could lead to an increase in your future state pension payments.

How can you boost your pension?

To determine your eligibility, you can conveniently review your National Insurance record online at gov.uk. If you're below the state pension age, you can also examine your state pension forecast or contact the Future Pension Centre. For those already above the state pension age, The Pension Service is your go-to resource.

Experts are urging individuals to organise their paperwork and details promptly, as the run-up to the April deadline is anticipated to trigger a spike in traffic to government websites and phone lines. A bit of preparation could be crucial in ensuring you don't miss out on enhancing your retirement savings.

How much will it cost?

The expense for bridging a gap is approximately £824 per year of missed contributions, with partial years costing less. Each additional year of National Insurance will boost your state pension by roughly 1/35th, which amounts to about £328 per year. Provided you live more than three years beyond your state pension age, you will have recovered the cost of topping up.

Free ways to boost State Pension

Before you shell out to fill any gaps, ensure to verify whether you automatically qualified for National Insurance credits during the relevant years. For instance, those who didn't claim Child Benefit due to the High-Income Child Benefit Charge may be eligible for free credits that could enhance their state pension.

Important considerations

Morrissey also recommends consulting with the Future Pension Centre before investing any money to confirm that topping up will indeed be beneficial. For some individuals, such as those who opted out of the State Second Pension, purchasing additional credits may not be a possibility. As the deadline draws near, it's the perfect time to evaluate your National Insurance record and seize this chance to secure an improved state pension.