HMRC currently allows you to voluntarily fill any gaps in your National Insurance record going back to 2006. By doing so, it’s possible to boost your state pension entitlement.
The state pension top-up deadline had been extended from April 2023 to 31st July 2023. This deadline has now been pushed back still further to 5th April 2025.
This means if you have any ‘gaps’ in your National Insurance record, you can top up these before the deadline to ensure they count as full years. After the deadline, only the past 6 years will be eligible for topping up.
State Pension Entitlement
To qualify for the full state pension, you need 35 full years of qualifying National Insurance contributions. If you have between 10 and 35 years of contributions, you’ll only get a proportion of the full pension.
This means, that if you have a number of missing years between 2006/07 and 2018/19, it could be worthwhile topping up your contributions.
How much does it cost?
It costs £824 to ‘buy’ a missed year. For each year you buy, you’ll recoup the cost within 3 years of retiring. This is because each extra year adds about £275 to your pension.
Imagine you didn’t pay National Insurance for 6 years after 2006 because you were at home raising your family. You can buy these years back for £4,944. When you retire, you’ll get an extra £1,650 per year in your pension (at current rates).
The older you are, the more important it is to bring missed years up to date. Imagine you are 64 and due to take your state pension at 66. You have 30 years of qualifying contributions, but no ‘missing’ years during the last six years. However, you have five missing years from 2009 onwards. By buying these back now, you can ensure you get the full state pension when you retire.
How do I check and how to top-up?
The first thing you should do is check your National Insurance record. This will show you where any gaps are. You then need to call HMRC to get an 18-digit reference number that will allow you to make the voluntary Class 3 payments.
Fortunately, HMRC have introduced a tool to help you with this which you can access here.
The next thing you should do is top up any partially paid years. For example, if you paid 50 weeks of NI contributions for 2012/13, you’d only have to pay £31.70 to turn it into a qualifying year. Once you’ve topped up partial years, then you should top up any missing years.
I’m already drawing my pension. Can I top it up?
You can still do a pension top-up if you are already drawing it. However, the procedure is slightly different.
Firstly, you’ll need to contact the Pension Service to talk through your options. If you do decide to top up your pension by buying missing NI years, the increase to your pension will not be backdated. In other words, you’ll get a higher pension after you’ve made the payments.
If you have any queries in regards to eligibility, and to check if you need to top up, please check your National Insurance Record or contact HMRC’s National Insurance helpline directly.
