An online service designed to simplify the way you check your state pension and make any missed payments. National Insurance (NI) loans It will be launched within the next six months.
Many people bought extra NI credit this year and boosted their credit. state pension up to thousands of pounds. There is government State pension extended the loading period several times Due to popular demand, you now have until April 2025.
However, checking and purchasing missing NI contributions is still time-consuming and complex; Getting the 18-digit payment number requires a phone call to the Pensions Service and then HMRC, and some people face long waiting times to get through to their phone lines.
Sign up for Money Morning
Don’t miss the latest investing and personal finance news, market analysis and money-saving tips with our free twice-daily newsletter
Don’t miss the latest investing and personal finance news, market analysis and money-saving tips with our free twice-daily newsletter
But the good news is that the government has confirmed that it has set up a digital tool to streamline the process.
We explain how it will work and when it will be available.
How will the online state pension service work?
HMRC and the Department for Work and Pensions are working together to launch an online service that the “vast majority of customers” can use to check and top up their state pensions.
The new service will include information to help customers decide which years they may want to make up their shortfall, based on the gap years they need to fill and the cheapest or most advantageous years in which they can pay voluntary NI contributions. Customers will then be able to pay online if they wish.
The service will also provide state pension estimates and projections based on National Insurance records.
It is aimed at people who want to check and pay off their NI loan quickly and do not need to speak to a government advisor before paying for voluntary contributions.
A government spokesman said: “We are building a new online service that will allow people to see whether voluntary National Insurance contributions will increase their state pension and then pay any payments.
“The new service is currently being developed and tested to make absolutely sure that it is easy to use and provides accurate information in a simple way.”
When will it start?
The government has said it aims to roll out the service later in the 2023-24 financial year. This means it should be released within the next six months, i.e. before April 6, 2024.
Once the online tool is available, the guidance on how to check your NI record and top up your state pension on gov.uk will be updated to explain how to use the new service.
Can I still get advice and top up my pension over the phone?
Yes, if you feel more comfortable talking to someone on the phone, you can still call to find out about your NI registration, your state pension forecast and pay for the missing years – and you can still do this. when the online service is started.
Contact the Future Pension Center on 0800 731 0175 or, if you are already at state pension age, call the Pension Service helpline on 0800 731 0469.
How much can I increase my state pension?
Buying extra NI credit can be a great way to boost your state pension income with little risk.
Spending £907 on buying a NI loan (meaning one year’s NI contribution) could unlock up to £7,740 of extra income over a typical 20-year retirement period.
By investment platform Interactive Investorsomeone buys 10 years of NI contributions at a cost of £9,070 (10
take note the exact cost of buying a one year NI credit It depends on which year it is and whether it is a 2nd or 3rd year.
To increase your pension entitlement, you can normally purchase up to six NI years to fill in the gaps. For example, if you took a break from work to raise children or care for elderly relatives. You usually need 35 full NI years to get the current maximum state pension of £203.85 per week. This means that if you have gaps in your record and do not have 35 years of NI contributions, you may not be able to get a full state pension later in life.
However, when the new state pension was introduced in 2016, the government allowed the gaps dating back to 2006 to be closed.
You currently have until 5 April 2025 to purchase voluntary National Insurance credit to fill gaps dating back to April 2006. After this date, you can only purchase a six-year retroactive credit.
