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Voluntary NI contributions discounted rate ends on 5 April 2019

20 January 2019

Royal London is urging adviser firms to make clients aware they can top up their state pension before 5 April at a discounted rate.

The mutual says people thinking about paying voluntary National Insurance Contributions to fill past gaps in their contribution record will be better off doing so before 6 April.

Under current rules, anyone who comes under the new state pension system (those reaching pension age after 5 April 2016) can fill gaps in their NI record at especially favourable rates.

But, Royal London points out, these concessionary rates expire on 5 April 2019 after which filling those same years could cost several hundred pounds more in total, Royal London points out.

“Those who are thinking of filling gaps and, crucially, who have checked that they will boost their state pension by doing so, can save money by acting before the end of the current financial year.”

The mutual added that at present, anyone covered by the new state pension system with a gap in their National Insurance record for any year from 2006/07 to 2015/16 has until 5 April 2023 to fill those gaps. “On the face of it, this means that there is no rush to do so.  However, under a special concession, those who pay voluntary contributions by 5 April 2019 qualify for special rates.”

In 2019/20 the normal rate for buying back one week of NI contributions will be £15.  But, there are different rates for those acting now – see table (click to expand).

Source: https://www.gov.uk/voluntary-national-insurance-contributions/rates

The table shows that someone wishing to fill a gap for 2010/11 will save over £150 by acting before 6th April.  Someone wishing to fill six years from 2010/11 to 2015/16 would save over £500 by acting now.

Royal London points out that those considering topping up should check that doing so will actually boost their state pension, as complex transitional rules mean that this will not necessarily be the case.  They can do this by contact the DWP Future Pension Centre whose contact details are at: www.gov.uk/future-pension-centre .

Royal London has produced a guide to topping up state pensions which explains more about the process and can be found at: https://www.royallondon.com/media/good-with-your-money-guides/topping-up-your-state-pension/

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