The new system could be handy(Image: Getty Images)

DWP's new digital service could help people boost State Pensions

People can now check if they can boost their State Pension with a few 'simple clicks' using the online service.

by · ChronicleLive

A new digital service allows people to see if they can boost their State Pension pots through a 'few simple clicks'. The forecast service from the HMRC and DWP allows people under the age of State Pension eligibility to view and plug gaps in their National Insurance record, should it benefit them.

The service also shows how much of an increase people could see, as well as details of the voluntary NI contributions they would have to make to achieve a heightened figure. People can use the service to select years to fill, before securely paying and receiving confirmation that their National Insurance record will be updated.

People can usually pay voluntary contributions dating back six tax years, with the deadline falling on April 5 each year. And last year, the Government announced that they would extend the voluntary NI contribution back-payment period to April 5, 2025 for those affected by new State Pension transitional arrangements.

Eligible parties can currently plug gaps between April 6, 2006 and April 5, 2018 - but as of next April, people will only be able to backdate contributions by a maximum of six years, in line with normal time limits.

Financial Secretary to the Treasury Nigel Huddleston said: "Having peace of mind when planning for retirement is crucial to ensure people can enjoy later life," while Pensions Minister Paul Maynard, added: "The state pension is the foundation of income in retirement, which is why we have introduced this new online tool to help simplify boosting it for those who are able to.

"I would encourage everyone to check their state pension forecast and to take a look at how they could improve their state pension award with only a few simple clicks."

While topping up NI contributions won't always boost a pension, people can use the new service to weigh their options up. Some people may be eligible to claim NI credits rather than having to pay to plug gaps.

The digital service is accessed via personal tax account login details, and if you don't have a HMRC account, you can register on Gov.uk. Those who are currently receiving a State Pension, the self-employed and people living outside of the UK who missed out on qualifying years working abroad will not be able to access the service at present.

Former Pensions Minister Sir Steve Webb, said: "It is very good news if people will be able to top up their national insurance record online. Until now people have had to battle through on two different phone lines – one to check with DWP which years they can top up and then one to HMRC to get a reference number to make a payment.

"It must be a step in the right direction to be able to do all of this without hanging on a telephone. However, simply getting your NI record updated by HMRC is only half of the story. It then needs DWP to reassess your state pension entitlement based on your improved contribution record.

"There are already too many cases where people wait months or longer to get their pension figure revised. It is vital that the Government puts in place new capacity at DWP to process all of these changes; otherwise they will simply have created a new bottleneck in the system."

Alice Haine, personal finance analyst online investment service at Bestinvest by Evelyn Partners, added: "Whether someone needs to top up will depend on how many more years they plan to work and whether they are eligible for NI tax credits, which fill the gaps – such as those who are sick, were unemployed or took time out to raise a family or care for elderly relations."

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