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DWP eases 6-year rule on state pension top-ups – what that means for you

The government’s Future Pension Center has stated that anyone who has reached state pension age after April 2016 will be able to purchase Social Security credits for missing years since April 2006

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DWP Universal Credit rules that every applicant must follow

Starting this month, men and women can top up their state pension, even after they retire, according to relaxed rules.

The Department for Work and Pensions (DWP) has paused the six-year deadline to top up missing qualifying years of Social Security – helping to boost your retirement income to the full state pension.

The government’s Future Pension Center has stated that anyone who has reached state pension age after April 2016 will be able to purchase Social Security credits for missing years since April 2006.

This means that a man born after April 5, 1951 or a woman born after April 5, 1953 can top up their state pension through voluntary RV contributions until April 2006.

The relaxed rules apply until April 5, 2023, when the six-year period will come into force again.







Since April 2006, men born after April 5, 1951 or women born after April 5, 1953 have been able to supplement their state pension with voluntary NI contributions
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(Getty Images)

Helen Morrissey, Senior Pensions and Retirement Analyst at Hargreaves Lansdown, told The Mirror: “This is a great opportunity for people to close gaps in their state pension balance sheet and increase the amount they get in retirement.

“A lot of people will have these gaps if they were unemployed or didn’t earn enough to get a Social Security loan, and being able to top up their pension in this way is very inexpensive and a good option for many people.”

“Being able to go back just six years can be frustrating, so being able to load up to 2006 will be hugely useful.”

State pension top-ups allow those with a deficit in their state pension to top up their payments.

To receive the full pension you need 35 years of insurance on your Social Security balance sheet, if there are gaps you will be paid a lower weekly amount.

However, by purchasing voluntary NI contributions you can fill any gaps over the age of 35, meaning you have the option of increasing your pension to the full amount of £185.10.

Of course, this is only worthwhile if you have gaps in your pension, you do not have to buy additional credit if you are already receiving the full amount, as your pension will not increase any further.

You can also pay voluntary contributions if you live abroad, whether you work or not.

The only requirement is that you have previously lived in the UK for at least three consecutive years or paid NI contributions for at least three years.

It currently costs £824.20 to buy a year’s worth of Social Security credits (assuming you pay Class 3 NI).

This would add £275 a year to your state pension. So it takes three years before you get your money back.

If you expect to draw the statutory pension for the next three or more years and fall behind with payments, the voluntary contribution is worthwhile.

Be aware of the risks, however, as increasing your state pension can sometimes mean you receive a lower pension credit or pay higher taxes if your income flips into the next tax bracket.

If you’re self-employed, you’ll pay £3.15 a week in social security tax on your contribution – or £15.85 at the higher tier.

Before making NI voluntary contributions, you must review your NI records for gaps and obtain a pension projection.

Talk to the Future Pension Center and they can assess whether it’s worth upgrading.

You can contact the government’s Future Pension Center here.

If you are not yet retired, you may be able to claim top-ups by caring for your grandchildren or caring for a loved one. See how to do it here.

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https://www.mirror.co.uk/money/dwp-relaxes-six-year-rule-26828971 DWP eases 6-year rule on state pension top-ups - what that means for you

Fry Electronics Team

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