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HMRC and DWP subject six-month warning as pensioners to lose hundreds

Money gurus are sounding the alarm for Brits to get their act together within months risk a nasty surprise with their State Pension dosh. The teams at HMRC and the Department for Work and Pensions are telling people to urgently check their National Insurance record.

Since its kick-off in April 2024, over 10,000 payouts totalling a hefty £12.5 million have been dished out through the new online system aimed at beefing up people’s State Pension, HM Revenue and Customs (HMRC) has spilled the beans.

Brits have got until the April 5, 2025 to give their State Pension a bit of a boost by chucking some voluntary National Insurance contributions into the pot to cover any holes in their NI record from the April 6, 2006 to the April 5, 2018.

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Alice Haine, the money whizz at Bestinvest by Evelyn Partners, the snazzy online investment platform, said: “Taxpayers with any shortfalls in their state pension record have been urged by the Government to act now and plug the gap by making voluntary contributions before this golden opportunity to maximise their state pension passes. People can currently plug any shortfalls by backdating their National Insurance (NI) contributions – but the clock is ticking as the deadline to take advantage of this one-off concession closes in less than six months.”



The Department for Work and Pensions has issued a warning for people to take action soon
The Department for Work and Pensions has issued a warning for people to take action soon

“Buying back missed years can be a great way for many people to bolster retirement income as the state pension provides a guaranteed monthly income for the duration of your retirement. Most importantly, that income is currently set to increase year-on-year by at least 2.5% and probably more, because of the triple lock”, reports Plymouth Live.

“Checking your personal tax account will quickly identify any gaps in your National Insurance record and whether you have enough qualifying years to receive a full state pension an extremely valuable source of income considering the full new state pension will rise by 4% or £460 a month in April 2025 to almost £12,000. This will become vital in the later stages of life when you may not be fit enough to continue working or have inadequate private pension savings.”

“Typically, taxpayers can only backdate their NI contribution history by six years, but the government is currently allowing people to pay to fill gaps on their NI record all the way back to April 6, 2006 an extremely beneficial move designed to help those affected by new State Pension transitional arrangements. After the April 5, 2025, deadline next year, the system will revert to the normal time limits, which means people will only be able to make voluntary contributions for the previous six tax years.”

“Your state pension entitlement is determined by the number of qualifying NI years you have. People typically need at least 10 qualifying years of NI 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.”



People risk not have enough money in their State Pension payments
People risk not have enough money in their State Pension payments

“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 3.7 million 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, which is why for some people calling the Government’s Future Pension Service to double check how many years they can buy and whether voluntary contributions really will add to their state pension may be key for those unsure about such a move.”

“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. Pension shortfalls and errors that have come to light in the last decade have particularly affected women who gave up work to look after children and widows and it is now thought many divorcees could also have a State Pension shock awaiting them, which is key keeping tabs on your state pension record is so important.”

“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.”