Is it worth paying voluntary National Insurance contributions?

Here’s what you need to know about voluntary National Insurance contributions and how they can give your retirement savings a financial boost.

| 9 min read

The State Pension represents an important component of most people’s income in retirement. For some it’s their only income, or a large part. So how can you make the most of it – and are there other ways to boost your retirement income?

Why is your National Insurance record important?

If you are employed or self-employed in the UK you pay National Insurance (NI) contributions once you reach a certain level of earnings. These payments qualify you for particular benefits and, very importantly, the State Pension. As well as working, you’ll get NI credits in other situations such as full-time education or caring for a child.

You usually need 35 qualifying years to get your State Pension in full. Crucially, you won’t get any State Pension at all if you have less than 10 years’ of NI contributions.

After that you can think of each qualifying year of NI you have being worth roughly £330 a year from retirement age, an amount that’s set to at least keep with inflation in line with the government’s ‘triple lock’ commitment.

How much State Pension will I get?

The State Pension is a really important foundation to people’s retirement income. We are talking around £23,000 a year for a couple with full records. That can cover a lot of the basics, so an understanding of the rules for qualification is a really important part of retirement planning.

However, most people are going to need more to maintain their standard of living as they move into retirement. What’s more, the State Pension is only payable from 66 at present. That’s going to rise to 67 and then 68. Further into the future, who knows? Our longevity may mean the State Pension age rises even more. It is fair to assume we will all have an entitlement that will provide a foundation of income in later life, but when it’s paid and the amount is not set in stone.

If you want more, or you want to retire before State Pension age, it makes sense to take responsibility for your own retirement journey. And the best way to do that is to make sure you have enough other sources of income and money set aside.

How do I check my State Pension entitlement?

You can get a State Pension forecast from the website here. As well as checking your State Pension age, a forecast can tell you how much you could get and how it might be possible to increase it.

You can also keep tabs on how your entitlement to the State Pension is building by monitoring your NI contribution record, which again you can check at Here you can see your history of NI credits received and any gaps in contributions or credits. It’s often possible to pay voluntary contributions to fill these gaps, either for a full year or a partial one where you have paid some NI but not enough to gain a credit.

Remember, building NI credits is binary, you either accrue a year or you don’t, and where you have been close to attaining one for a particular year it may be possible to pay a small amount of money to top that year up. In the fullness of time this could represent a bargain.

Your State Pension may include a deduction if you were ‘contracted out’ of the Second State Pension or SERPS under a previous regime of State Pension accrual. This applies to earnings-related pension schemes at work (for example a final salary or career average pension) before 6 April 2016 and workplace, personal or stakeholder pensions before 6 April 2012. If you were 'contracted out' of the additional state pension before 2016, topping up may not help you, but if applicable it’s worth looking into whether you can close any gap by purchasing extra years.

Read more: What sort of a retirement does the State Pension provide?

Is it worth paying gaps in my National Insurance?

Much depends on whether you are going to get to the critical level of (at least) 35 years in the future anyway, for instance through working between now and retirement. There is no point paying for a top up that gives you no benefit.

The closer you are to State Pension Age the more obvious this will be. If you only have a few years to go, and you are not going to reach a full entitlement, then it definitely makes sense to consider top ups. Those that have already reached State Pension Age and have found they have missing years can also look to act. A modest outlay could boost a State Pension income by hundreds, and in some cases thousands of pounds, a year. It potentially represents a far better ‘rate of return’ than any other way of using savings.

For instance, filling a whole year in the 2023/24 tax year costs £907.40 for employees and less for those that have already paid some NI for the year in question. If you lived 20 years, the amount you would get back would be over £6,000, and you would only need to live around three years beyond State Pension age to get all your money back. After that it’s pure profit.

Some self-employed individuals may be able to secure an even better deal. Low earners with profits of under £6,725 in 2022/23 and 2023/24 tax years may, for instance, be eligible to pay Class 2 voluntary contributions, which are cheaper than Class 3 contributions at just £179 per year (for 2023/24), to buy an extra year of state pension.

A word of warning though. The State Pension, like other income is taxable. You might not benefit from the full amount of extra money as some will be taken in income tax. In addition, boosting State Pension income can affect entitlements to means tested benefits. Notably, if you claim Pension Credit, which tops up the income of very low earners over State Pension Age, any increase in the State Pension would normally reduce an award. This often means that you would be no better off paying voluntary contributions.

How do I buy National Insurance credits and where can I get them?

Normally you can only go back six years to pay voluntary NI contributions, but there is a recently extended deadline of 5 April 2025 to boost any gaps in your records from 2006 to 2016.

Once you have a State Pension forecast to check your entitlement, you need to find out for certain if voluntary NI contributions will increase your income when you reach State Pension age. Those under state pension age can view gaps in their National Insurance (NI) record and check their state pension via the website. You can then look to pay to plug any gaps. However, if you are not able to use the online tool, or you have any doubts whether voluntary NI contributions will increase your income, speak to the government’s Future Pension Centre to discuss your options and the cost of making the voluntary contributions.

More retirement income options

On top of State Pension, there are some other ways to invest for your retirement income.

1. Personal pensions

Alongside any work pensions and the State Pension, personal pensions such as SIPPs can help you provide a guaranteed income in retirement using an annuity, or more flexible income using pension drawdown. You won’t be able to get at your money until retirement age, but pensions can offer the valuable incentive of tax relief on contributions you make.

How does a SIPP work?

2. ISAs

ISAs, or Individual Savings Accounts, can offer a further way of providing for retirement. As with pensions, investment returns are tax free, and although there’s no tax relief when you pay money in, you can take your money out tax free at any time. Plus you don’t have to wait until a specified age.

How does a Stocks & Shares ISA work?

Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.

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