Marvin OnumonuEmployers are being urged to act swiftly to raise awareness of an impending state pension rules change, warns Hymans Robertson.
With the 5th April deadline approaching, employees need to be informed about topping up their state pensions, particularly men born after 5th April 1951, and women born after 5th April 1953.
Filling gaps in National Insurance Contributions (NIC) records dating back to 2006 could significantly boost state pension incomes.
The consultancy noted that those with under 35 qualifying years do not receive the full state pension, but backpaying NICs can rectify this and enhance future pensions.
Hannah English, head of DC corporate consulting at Hymans Robertson, said: “It’s crucial that employers effectively communicate to their workers the potential returns if they top-up their NICs.
“For example, it would cost an individual roughly £824.20 to fill a one-year NIC gap based on the 2022-23 rate (slightly more if the gap is in 23/24 or 24/25).
“Based on the same rate, this would add £328.64 to their yearly state pension income.”
English added: “After only three years of receiving their state pension they would see their money back in their pocket – with some to spare as well.
“Employers have a duty to help alleviate the gender pensions gap and this change will disproportionately affect the female workforce.”
She said: “Women are more likely than men to have worked part-time or had career breaks, meaning that a higher proportion of women have gaps in their NIC record.
“If employers are serious about closing the gender pensions gap, raising awareness of the April deadline to top up NICs – and playing a clear role in communicating this change – is a key step that they could make towards a more equitable pensions system.”
