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Workers with holes in their UK state pension pots have been offered a three-month extension to boost their retirement payout.
The government this week moved the deadline for individuals with gaps in their national insurance contributions to July 31, enabling savers to cover missing payments going as far back as 2006. After the deadline, anyone seeking to contribute will only be able to backfill six years.
Changes in the deadline apply to anyone who reached or will reach the state pension age from April 2016 onwards. It followed a recent surge in enquiries to government agencies from individuals seeking information on how much they needed to pay into the system.
“We recognise how important state pensions are for retired individuals,” said Victoria Atkins, financial secretary to the Treasury, “which is why we are giving people more time to fill any gaps in their national insurance record to help bolster their entitlement.”
The extension will be welcome news for anyone who has missed payments, as many have encountered difficulties in determining how much they should contribute.
UK taxpayers have been allowed to fill in a gap in their NICs record since the government introduced a new flat rate contribution for the state pension in 2016. Individuals are able to pay little over £800 to plug a full year’s gap, entitling them to an extra 1/35 of their state pension.
“It is vital that you check before handing over any money as you may be able to plug these gaps in a different way — by backdating a benefit claim for instance,” said Helen Morrissey, head of retirement analysis at Hargreaves Lansdown.
Anyone seeking to make contributions should consult the Future Pension Centre at the Department for Work and Pensions.
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