The NICs top-up countdown is underway again…

A third deadline for topping up State Pension entitlement is now coming into view.

“Don't it always seem to go, that you don't know what you got 'til it's gone?”

The words of Joni Mitchell’s Big Yellow Taxi, recorded over half a century ago, always come to mind when deadlines loom. Whether it is filing tax returns or a supermarket limited time offer, there is a slice of the UK population that will always wait until the last moment to act.

Sometimes, even a deadline is not enough for those ‘last minuters’ to overcome their inertia. For proof, look no further than the estimated 1.1 million people who missed the 31 January tax return filing date in 2024 (and please do not forget the 2025 cut-off is now imminent).

Another example of the deadline syndrome was, and is, the government’s efforts to encourage people to check their National Insurance contribution (NIC) record and top it up, if necessary (and affordable). The original deadline of 5 April 2023 was set by regulations made in 2013 as part of the reform of State Pensions introduced three years later. The regulations allowed for missed NICs dating back to 2006/07 to be paid at any time up to the deadline, rather than the normal period of within six years of being due.

It was not until around the start of 2023 that the concession attracted much attention. Then, when it did, the rush to the deadline began with a vengeance. Coverage in the media often highlighted the most extreme case, in which one year’s NICs was enough to bring the contribution record up to the qualifying minimum – turning no State Pension entitlement into about 29% of a full entitlement.

The lure of almost-free money prompted a rush of enquiries to the Department of Work and Pensions (DWP) and HMRC, which handles NICs. In March 2023, less than a month before the decade-old deadline was due to arrive, the Treasury announced a three-month extension. In June 2023, the July deadline was also abandoned with the DWP and HMRC kicking it down the road to 5 April 2025.

With that cut-off date now less than four months away, now is the time for all procrastinators to act. If that is you, start by checking your state pension position.

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Approved by Best Practice IFA Group on 13/11/2024.