Individuals have until 5 April 2025 to maximize their state pension by making voluntary National Insurance contributions (NICs) to cover any gaps in their NICs record from 6 April 2006 to 5 April 2018.
Topping up your pension contributions can be very lucrative, and below we discuss some of the considerations you should make.
Why top up your National Insurance record?
How many full National Insurance qualifying years you have is important, as it goes some way to determining how much state pension you will receive when you retire.
You may find that you have gaps or part years on your NICs records for a number of reasons, such as, if you were employed on low earnings, unemployed but not claiming benefits, on maternity leave or living/working abroad.
If your records are incomplete, you can make voluntary contributions for one or more qualifying years (known as Class 3 contributions or Class 2 contributions for those who are self-employed (only by 31 January after the end of the tax year for Class 2), to boost your state pension entitlement.
Everyone can top up their state pension in this way if they have gaps, but the cost of the extra contributions will vary depending on which system you qualify under and the tax years in question, which we cover below.
How many years of contributions are needed for a full state pension?
You now need 35 years of National Insurance Contributions to qualify for the full state pension, which is worth £221.20 a week in 2024-25.
But to qualify for any state pension at all, you will need 10 years of National Insurance Contributions.
What is the deadline for voluntary contributions and how far back can I top up?
The deadline for voluntary National Insurance Contributions from April 2006 up to April 2017 has been extended by HMRC to 5 April 2025.
The extension will mean men born after 5 April 1951 or women born after 5 April 1953 have more time to check their records. They can then decide whether to pay voluntary contributions to make up for gaps they may have in their National Insurance record from April 2006.
Ordinarily, individuals can only pay voluntary National Insurance contributions for the previous 6 tax years. The deadline is 5 April each year.
Therefore, this period to make voluntary contributions (until the deadline of 5 April 2025) is a good opportunity for those who need to top up further back than the usual 6 tax years.
How much do voluntary National Insurance contributions cost?
The cost for voluntary contributions will depend on when the gaps in your record occurred.
The standard cost of buying ‘Class 3’ National Insurance contributions is £17.45 for a week of missing contributions in the 2023-24 and 2024-25 tax years. It would cost you £907.40 for an entire year.
However, if you are looking to fill gaps that occurred in past tax years, you would pay the rate from those years. Voluntary contributions for the last four tax years are:
- 2024-25: £17.45 per week (£907.40 per year)
- 2023-24: £17.45 per week (£907.40 per year)
- 2022-23: £15.85 per week (£824.20 per year)
- 2021-22: £15.40 per week (£800.80 per year)
For those able to fill gaps between 2006 and 2017 (men born after 5 April 1951 and women born after 5 April 1953), the cost for a week is £15.85.
How much could topping up be worth?
Most of the time a full National Insurance (NI) year costs £824, unless you are topping up the 2023/24 tax year (which is £907.40) or topping up the 2020-21 or 2021-22 tax years which are about £20-£30 cheaper. It can also vary if you are self employed or topping up a partial year.
As an example, on the basis of it costing £824 per year, if you were topping up 2 full years you would pay about £1,648. In this case your would ‘breakeven’ on this cost if you claim the State Pension for 3 years. If you were to live 20 years after the state pension age, you would benefit by £11,497 before tax.
The table below shows the overall gain/loss based on topping 2 years and the length of time that you receive a state pension.
| Years claiming the state pension after topping up 2 years | Loss / Gain (before tax) |
|---|---|
| 1 | -£991 |
| 2 | -£334 |
| 3 (when you breakeven) | £323 |
| 4 | £981 |
| 5 | £1,638 |
| 10 | £4,924 |
| 15 | £8,211 |
| 20 | £11,497 |
| 25 | £14,784 |
| 30 | £18,070 |
Your gain / loss will vary based on the length of time that you are topping up and the length of time that you receive a state pension.
How to pay voluntary NICs?
If you choose to make a voluntary contribution, or you want to pay quarterly when you receive a bill, you will first need your 18-digit reference number. If you do not have this you can request it via HMRC’s telephone helpline on 0300 200 3500 which is open Monday to Friday, 8am to 6pm.
The lines can be very busy and you may not always be able to get through to an advisor. If you can’t get through, you can also pay by cheque with your National Insurance number as a reference.
- Class 2 – Most self-employed people make Class 2 contributions as part of their Self Assessment tax bill. However, if you don’t pay through Self Assessment, you can use the ‘Pay now’ link on the GOV.UK pay voluntary Class 2 National Insurance page. You’ll need your banking details (account number and sort code) and your 18-digit reference number.
- Class 3 – To pay Class 3 contributions if you need to fill gaps in your record, you can use the ‘Pay now’ link on the GOV.UK pay voluntary Class 3 National Insurance page. You’ll need your banking details (account number and sort code) and your 18-digit reference number.
- Staying up to date for future years – If you are not making National Insurance contributions (for example, if you are employed but earning less than £123 per week) and want to make ongoing voluntary contributions to ensure you continue to have a full National Insurance record in future years, you can set up a Direct Debit to pay in monthly.
Other things to consider before you decide to make voluntary contributions
Voluntary contributions don’t always increase your state pension and they can’t be refunded, so make sure you will benefit before making them.
You will need at least 35 qualifying years to receive the full state pension (or 30 years for those who reached state pension age before 6 April 2016). Therefore, having a gap doesn’t necessarily mean you won’t accumulate enough years to receive the full state pension amount.
Also please be aware of the following:
- If you claim Pension Credit, an increase in the state pension would usually reduce your Pension Credit award. This might mean that you are no better off paying voluntary contributions.
- If you die before the state pension age, you won’t receive any state pension.
- If you are in very poor health, or if you have a short life expectancy, you may not benefit from an increased state pension, since it usually takes a number of years to ‘break even’ on your voluntary contributions.
- You may not need to pay voluntary contributions if you can use contributions from your spouse or civil partner, late spouse or civil partner, or former spouse or civil partner.
- A higher state pension might mean you pay more tax.
Request a State Pension Forecast
Before making voluntary National Insurance Contributions, you should review your state pension forecast. This forecast will help you determine:
- how much state pension you could get
- when you can get it
- how to increase it, if you can
You can get your state pension forecast online at GOV.UK
To use this service, you will need to prove your identity using the Government Gateway. You will be able to register for the Government Gateway if you have not used it before.
Applying online is usually the quickest way to get a forecast. If you will be reaching your state pension age in more than 30 days you can also:
- fill in a BR19 application form and send it by post
- call the Future Pension Centre who will post the forecast to you
Need to know more?
You can find out more about making Voluntary National Insurance Contributions at GOV.UK here.
Ammad provides personal taxation planning, advisory and compliance services.