It can be easy to take the State Pension for granted when thinking about your retirement planning, but if you were to purchase it from your pension savings it could cost over £275,000 to buy an annuity with similar benefits.
5 April 2025 deadline
If you’re aged 45 to 70 it is worth checking to see if you can boost your State Pension. The current arrangements that provide the opportunity to top up gaps in your contribution history going back to 2006 will end on 5 April 2025 and after that you will only be able to go back six years. For example, you’ll have until 5 April 2030 to make up for gaps for the 2023/24 tax year.
Will you get the full State Pension in retirement?
The full rates for the State Pension this year are:
- £221.20 per week in 2024/25 for the new State Pension (for those reaching State Pension age on or after 6 April 2016)
- £169.50 per week in 2024/25 for the basic State Pension (the core amount in the old State Pension system)
However, the actual amount of State Pension you receive is based on your record of National Insurance Contributions (NICs).
You can go to www.gov.uk/check-state-pension to get your individual forecast.
If you click the link that says check your national insurance record you will be able to see any incomplete years going back to 2006. If these gaps cannot be filled in any other way, then it’s worth considering topping up your NICs to increase your State Pension.
What will it cost?
The current Class 3 rates (voluntary NICs paid by people wanting to fill gaps in their contributions record) for the 2024/25 tax year are £17.45 a week, so roughly £907 for a year. This is the same cost as last year.
| Voluntary class 3 National Insurance contributions | |||
| Tax Year | Weekly Rate | Cost per Year | Deadline |
| 2023/24 | £17.45 | £907.40 | 5th April 2030 |
| 2022/23 | £15.85 | £824.20 | 5th April 2029 |
| 2021/22 | £15.40 | £800.80 | 5th April 2028 |
| 2020/21 | £15.30 | £795.60 | 5th April 2027 |
| 2019/20 | £15.85 | £824.20 | 5th April 2026 |
| 2018/19 | £15.85 | £824.20 | 5th April 2025 |
| 2017/18 | £15.85 | £824.20 | 5th April 2025 |
It may cost you less if you were self-employed and can use Class 2 contributions.
Each additional year could increase the amount of State Pension by 1/35th. Based on this year’s rate it would boost the pension by £328 a year, meaning it would take less than three years to get your money back.
Based on a life expectancy of 20 years from State Pension Age, this could provide around £6,500 over the course of retirement (excluding any annual increases).
National Insurance credits
When looking at gaps in your NICs, you should also check to see if you are entitled to any National Insurance credits.
Claims for some credits can be backdated for many years; one credit (sometimes referred to as ‘grandparents credits’) can be backdated nearly a decade, whilst another for military spouses can be claimed all the way back to the mid-1970s.
NI credits are also paid to the person receiving Child Benefit for children under 12. It is worth checking that these credits apply to the parent that needs them, as it is possible to transfer them to the other parent.
It is important for any new parents to apply for Child Benefit even if they chose not to receive the payments to ensure NI credits are paid, as these can currently only be backdated for three months. However new legislation from 2026 will allow these missed NI credits to be claimed beyond the three month period.
Things to Consider
If you have a number of years before you reach State Pension Age and you intend to continue working, your employment could increase your NICs years to the maximum required without the need to top up.
You should be aware that a larger State Pension could impact other aspects of your financial life – for example, the gain from buying extra years could be reduced if it pushes you into a higher tax bracket. If you were to be near the threshold of either paying tax or hitting the higher or additional rate tax brackets once your State Pension and other income is combined, you will pay (more) tax on your pension income if that income increases.
This will mean it takes longer for you to break-even on any voluntary NICs you make – though it’s likely to still be worth doing. However, if you have a reduced life expectancy, or die unexpectedly, you might not get all your money back.
Next Steps
This is a complex area so before doing anything else you should check that additional NICs would increase your State Pension as this will not be the case for everyone, and you cannot increase your pension above your personal maximum.
If you contact the Future Pension Centre (0800 731 0175), they will be able to give you a personal calculation and tell you if you can increase your State Pension.
If you have deferred your pension or are already receiving your State Pension you should contact the Pension Service on 0800 731 0469 full contact details can be found on the Pension Service pages .
How to buy missing years?
After confirmation from the Future Pension Centre or the Pension Service that buying additional years would result in extra pension, you need to decide if you want to top up, and how many years you want to buy.
To find out how much topping up would cost you’ll need to contact HM Revenue & Customs (HMRC) they will give you an 18-digit reference number.
The reference number is important as it will ensure the payment is allocated to the correct NICs record and right tax years. HMRC can give it to you over the phone (by post it takes about 15 working days).
How long will it take?
If you’re not yet claiming the State Pension, the payment can take up to 60 working days to process, after which you should see your NI record change to show the voluntary contributions you’ve made.
If you’re already claiming the State Pension, HMRC will notify the Department for Work and Pensions (DWP) that you’ve done so, and request they carry out a benefit review. Your payments won’t increase straightaway, but the increase will be backdated to the date you made the claim.
This article is written to provide information and intelligence. This information is provided for the purpose of general discussion and debate and should not be interpreted as investment advice.
Past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change.
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