Figures recently released by HMRC have revealed a sharp rise in voluntary National Insurance Contributions (NICs) over the past couple of years as people seek to top up their State Pension record.
Chance to boost your pension
In 2018/19, the total value of voluntary ‘Class 3’ NICs amounted to £119.3m; in comparison, the figure was £12.8m in 2016/17 – a nine-fold increase in just two years. This surge has largely been driven by the introduction of new State Pension rules in 2016, particularly the increase in the number of years’ contributions required to qualify for a full pension, from 30 to 35. As a result, it makes sense for some people to pay voluntary contributions, so they have enough qualifying years for a full State Pension.
Keep track of your pensions
It’s certainly a good idea to regularly review your pension provision, both private and state. Pension providers send out annual benefit statements detailing entitlements and you can also request a state pension forecast from www.gov.uk/check-state-pension.
Many people only review their pensions when they are about to retire, by which time it’s too late – make sure you don’t fall into that trap.