Could you top up your National Insurance record and increase your State Pension?

Private pensions may make up much of your retirement savings, but that does not mean you should discount the State Pension. Retirement planning is all about ensuring that you have enough income to live your desired lifestyle, and the additional income from the State Pension can help you achieve that.

In 2023/2024, you could receive £203.85 a week if you qualify for the full new State Pension. This represents the biggest ever increase after the State Pension rose in line with inflation of 10.1%, and it is likely to increase again in the future as economic circumstances change.

Additionally, the State Pension provides guaranteed income which can offer valuable stability in retirement.

That’s why it is important to make sure that you are getting as much as you are entitled to. However, the amount you receive is based on your National Insurance (NI) record and you may have gaps in yours, meaning that you cannot claim the full amount.

The government has twice extended the deadline to top up your record if you made contributions prior to 2016; you now have until 4 April 2025. However, it’s worth checking your NI record now, especially if you help family members with childcare, as you could be missing out on vital credits.

Read on to learn how you can make sure that you claim your full State Pension entitlement and boost your income during retirement.

You need 35 years of National Insurance contributions to receive the maximum State Pension

The new State Pension came into effect in April 2016 and the rules about National Insurance contributions (NICs) and pension entitlement changed.

The government records your NICs as credits – provided you earn at least £6,396 in a year (or £6,725 if you are self-employed) and pay NICs, you normally get a credit. But you will not get a credit for that year if you:

  • Are out of work
  • Are in work but earn less than the £6,396 threshold
  • Are self-employed but earned less than the £6,725 threshold
  • Have lived abroad.

Previously, you needed 30 years’ worth of credits to get the full State Pension, but this increased to 35 years for the new State Pension.

Luckily, you are normally able to buy credits that you missed over the past six years so you can top up to the 35-year threshold and get the maximum State Pension.

However, there were fears that the new system would unfairly affect those who made NICs before 2016, meaning they could have missed out on receiving the maximum amount of State Pension. As a result, the government put a transitional arrangement in place.

The deadline for topping up your record is now 4 April 2025

The government put provisions in place during the transition to the new State Pension to ensure that anybody who was already making NICs could still buy enough additional credits and receive the maximum State Pension.

Instead of being able to buy credits for the previous six years to fill any gaps, you could buy additional credits all the way back to 2006 if you made NICs prior to 2016.

Initially, the cut off for this was 5 April 2023, after which you would only be able to purchase credits for the last six years again. Missing this deadline could have meant that you were no longer able to buy the credits you needed to meet the 35-year threshold, potentially seeing you miss out on valuable income in retirement.

Fortunately, the government extended the deadline to 4th April 2025. This is excellent news if you have not already topped up your NICs and have gaps between 2006 and now, but it’s a good idea to review your NI record sooner rather than later.

According to MoneyHelper, it costs £907.40 for one year’s NICs credit in the 2023/2024 tax year for class 3 contributions. They also calculate that each additional qualifying year that you pay for could translate to an extra £302.64 a year in State Pension payments. You effectively get your money back after three years of receiving the State Pension, and after 6 years you would have doubled your money.

Family members who helped with childcare could be entitled to an additional £1,375 a year

In many cases, you can fill gaps in your NI record by paying for additional credits, but if you helped a family member with childcare, you may not have to. That’s because you could be entitled to “Specified Adult Childcare” credits instead.

If you did not meet the earnings threshold for an NI credit but were caring for a child under the age of 12, and the parent of the child claimed Child Benefit, you can claim a Specified Adult Childcare credit for that year. This means that you do not need to pay for an additional credit to fill that gap in your record.

According to figures reported in the Telegraph, you could get an extra £1,375 a year from your State Pension by claiming NI credits to fills gaps in your record from 30 years to 35 years. An estimated 150,000 people could be missing out on this extra income because they are unaware that they can claim these credits.

That’s why you may want to check whether you are eligible and apply to HM Revenue & Customs (HMRC) so you can fill any gaps in your NI record. Additionally, you may want to consider how this State Pension boost could help your family members if you have children of your own.

You may be avoiding claiming Child Benefit because you earn over £50,000 and are subject to the High Income Child Benefit tax charge. But it may be worth claiming anyway because it means family members who help with childcare can claim NI credits.

It should be relatively straightforward to find out if you can claim credits and if there are any gaps in your NI record by using the government “Check Your NI Record” page. A simple claim may translate to a significant amount of additional income during your retirement.

Get in touch

If you need advice about managing your income during retirement to ensure that you can afford your desired lifestyle, we are here to help.

Email or call 0330 828 4714 to get some advice today.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

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