How can voluntary national insurance contributions boost your State Pension?

Our research shows confusion abounds surrounding qualification for the State Pension. Here’s what you need to know about voluntary National Insurance contributions and how they can give your retirement savings a financial boost.

| 8 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 of it. According to our consumer research, 86% of consumers are, or expect to be, either fully or partly reliant on the state pension.* Yet confusion abounds about how much is paid, from what age, and the rules for qualifying.

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.

Our research revealed that one in seven do not know whether they will qualify for the State Pension and that, on average, people think you need 24 years' of NI contributions or credits to qualify for a full New State Pension, which is presently worth around £10,600 a year. 11% said they thought there was no minimum to qualify. *

In fact, you need 35 qualifying years to get it 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 £300 a year from retirement age in today’s terms, an amount that’s set to rise at least with inflation 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 over £21,000 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. Sadly, according to our research, less than half of consumers have checked their NI contributions.*

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. Again, if applicable, it’s worth looking into whether you can close this gap by purchasing extra years.

What sort of a retirement does the State Pension provide?

There are gaps in my National Insurance records – what should I do?

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 through Class 3 NI contributions 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 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 be eligible to pay Class 2 voluntary contributions, which are cheaper than Class 3 contributions at just £179 per year, 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. To do so speak to a specialist at the government’s Future Pension Centre to discuss your options and the cost of making the voluntary contributions.

*Charles Stanley Money Milestones research from Censuswide, March 2023

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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