Parents in the UK could face a potential loss of up to £33,000 in their state pension if they fail to address gaps in their National Insurance (NI) contributions before the upcoming tax deadline.
Many parents, particularly those who took time off work to care for young children, may be unaware that missing contributions could significantly reduce their retirement income.
According to Manchester Evening News, financial experts are now urging affected individuals to check their NI records and take action before the 5 April 2025 deadline, as time is running out to make voluntary contributions and secure a full state pension.
Why parents could lose thousands in retirement funds
Many parents, particularly those who took extended leave from work or worked part-time while raising children, may have missing or partial years in their NI record. This is significant because state pension eligibility is based on the number of qualifying years of NI contributions.
Personal finance expert Amy Knight from NerdWallet UK has highlighted that around 1.6 million parents who had young children between 2016 and 2018 are particularly at risk.
If they do not address these gaps before the end of the tax year, they could see their annual state pension income reduced by £1,310 per year—a cumulative loss of £32,750 over a 25-year retirement.
Since the full new state pension currently stands at £221.20 per week (2024-25 rate), missing just a few qualifying years could significantly impact a retiree’s financial stability.
How to check and fix National Insurance gaps
The UK government allows individuals to make voluntary NI contributions to cover missing years, but typically only for the past six years.
However, a temporary extension had allowed older gaps to be filled, meaning contributions for the tax years 2016-17 and 2017-18 can still be made—but only until 5 April 2025. After this deadline, the usual six-year limit will be reinstated, and these years will no longer be eligible for voluntary payments.
To check their NI record and determine eligibility for voluntary contributions, parents can visit the HMRC website. The process involves logging into their government account to review their NI record, identifying missing years that could affect their pension, and making voluntary payments via online banking to HMRC.
Financial experts emphasise that this National Insurance check takes around 15 minutes and could prevent significant financial losses in later life.
The deadline for voluntary contributions
The window to make voluntary NI contributions for the tax years 2016-17 and 2017-18 closes at midnight on 5 April 2025. After this date, any missing contributions from those years will no longer be accepted, potentially reducing a person’s retirement income permanently.
For parents who delayed their return to work until their child started school at age four, the risk is even greater. A gap of just a few years in their NI record could mean receiving less than the full state pension, unless they take action before the deadline.
What parents should do now
Given the financial impact of NI gaps, parents are advised to take immediate action. They should start by reviewing their National Insurance record through the GOV.UK website to check for any missing years.
If gaps are found, they need to determine whether they are eligible to make voluntary contributions before the 5 April 2025 deadline. If they qualify, making the necessary payments as soon as possible will help ensure they receive the full state pension upon retirement.
Experts warn that this opportunity to fill in missing years will not be extended further, making it a final chance for affected parents to secure their full retirement benefits.
