As we have previously highlighted, the 5th April 2025 deadline to fill gaps in your National Insurance record is almost upon us. Taking action now to fill any gaps in contributions could significantly boost your state pension entitlement. This deadline is important because afterwards you will limited to being able to top up missing National Insurance contributions for the previous six tax years only.
Under current rules, 35 years of national insurance contributions are required to be entitled to a full state pension. If you need to top up contributions for any missing tax years between 2006 and 2018, you only have until 5th April 2025 to do so.
Being a complex area, with everyone’s position being unique, we would recommend speaking to the government’s Future Pension Centre (FPC) and a financial adviser, as paying additional contributions does not always enhance your state pension entitlement.
Essentially it will be a case of doing your sums to work out if it will be advantageous. The cost of topping up a year costs just over £900 but where you are completing a partial year, the cost can be significantly less. Clearly you will need the funds to be able to do this but each complete year or contributions will give you up to £328 of extra state pension each year, which after about 3 years you should break even (£328 x 3 = £984). Over an expected retirement of say 20 years you would gain about £6,500 in additional pension (plus any inflationary increases) less the initial outlay of £900.
What should you do as a matter of urgency?
For those who have not yet reached state pension age:
Check your state pension forecast on your government gateway: https://www.gov.uk/check-state-pension
Check if you will receive the full state pension of £221.20 per week. If you do need extra years to reach the maximum, click ‘view your national insurance record’ towards the bottom of the page.
Where you have incomplete years from 2006/07 to 2018/19, they will be marked as ‘incomplete’. If that is the case, you may wish to think about topping up missing years before 5th April 2025.
The Future Pension Centre (FPC) is going to be really busy but you need to phone them to get personalised information as to whether paying these additional contributions will enhance your state pension entitlement or not. Their number is 0800 731 0175 and they are open Monday to Friday 8am to 6pm. Some years might be cheaper than others.
The FPC is going to be exceptionally busy, so if you think you may need to top up, please do not wait. You need to take action now.
Further reading: www.gov.uk
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