You have until April to boost your state pension by filling in any gaps in your national insurance record.
To get the full state pension of £185.15 a week, you need 35 full years of national insurance contributions. You need at least ten years on your national insurance record to get any at all.
Normally you are allowed to make up any missed national insurance contributions going back six years but until April 5, people who retired (or are due to retire) since April 2016 and are entitled to the new state pension can pay missed contributions dating back as far as the 2006-07 tax year — ten extra years of missed payments.
“Some people have gaping holes in their national insurance record and this will be the last chance to fill them,” said Steve Webb, a former pensions minister and a partner at the consultancy Lane, Clark and Peacock. “For many people, paying voluntary contributions can be great value for money and can boost a state pension in a cost-effective way.”
Voluntary contributions cost about £15.85 a week or £824.20 a year. Paying for one year of missed contributions could add £275 a year to your state pension.
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It means that paying £8,250 to fix a ten-year gap in your record could boost your state pension payments £2,750 a year, according to LCP. This would give you £55,000 extra over 20 years.
However, some people who were contracted out of the state pension should be careful before topping up contributions. Check with the government’s Future Pensions Centre through gov.uk or on 0800 731 0175 to make sure that paying extra will actually boost your pension.
“Also, if you have reached the limit of state pension that you can build up — ie 35 years — then buying extra years will be a waste of money,” said Tom Selby from the investment platform AJ Bell.
If you are unsure if you have any gaps you can request a national insurance record from HMRC. You can also get a state pension forecast.
Most workers have national insurance deducted from their pay automatically. Workers pay 12 per cent on earnings of between £1,048 and £4,189 a month and 2 per cent on earnings above that.
