State pension warning to millions of parents who risk losing out on £33,000

Millions of parents have been urged to check their records before April or risk losing thousands of pounds of their state pensions.

The warning is aimed at parents who took time out of work to care for young children – entirely or part-time – within the last decade.

The move may mean they have “missing” NI years, which can reduce a person’s rate entitlement.

Amy Knight, personal finance expert at , said: “Having babies can lead to losing out on more than just sleep. Stay-at-home parents, or those working part-time hours, may have ‘missing’ or ‘partial’ years on their NI record, where they have not paid in enough NICs, putting their in jeopardy.”

People only have until April 2025 to plug NI gaps dating back to 2006. After April, they can only make voluntary contributions for six tax years, which can cost them thousands of pounds.

People accumulate NI years through active employment or by receiving National Insurance (NI) credits, which are granted during periods of unemployment, illness, or while fulfilling parental or caregiving responsibilities.

Most people will need around 35 years of contributions to receive the full new , but some may need more. Those who have gaps, which may have occurred when credits weren’t claimed, can increase their by purchasing additional NI years to fill these gaps.

According to Nerd Wallet, around 1.6 million parents who had young children between 2016 and 2018 need to check their NI records “urgently” before the tax year ends.

Those who waited until their child started school at age four before returning to work could see their annual income reduced by £1,310 per year.

Ms Knight added: “Over a 25-year retirement, this could amount to a loss of almost £33,000 or more as the increases.”

The finance expert continued: “It takes just 15 minutes to log into the Government website to check your NI record, find out to make voluntary payments to turn these into qualifying years, and complete the transaction to using online banking.

“Paying voluntary contributions usually costs £17.45 for every week you didn’t pay in during a given tax year. Filling in four years’ worth of gaps could cost more than £3,600.

“However, for most people, the amount you’ll get back in over the course of your retirement will make this outlay of cash very worthwhile.”