Pension

Over four million people have topped up their state pension since 2001


  • Gaps in your National Insurance record may mean you are entitled to top-ups 
  • Over a third of people entitled to state pension miss out on the full amount
  • Topping your state pension up can add thousands of pounds to retirement funds



Topping up your state pension can give a boost of thousands of pounds to your retirement income – but Britons only have until July to meet this year’s deadline.

Since 2001 over four million people have made Class 3 National Insurance Contributions, allowing them to fill old gaps in their NI records and get a higher state pension.

Figures from the Department of Work and Pensions show that on average 193,000 people topped up each year from the 2000/01 tax year up until the 2020/21 tax year, wealth management company Quilter said.

The average cost of contribution for the four million people who topped up was £474 over the period.

In March the Government caved in to pressure and extended a crunch deadline to buy extra state pension top-ups after frustrated savers jammed its phone lines for weeks.

People trying to boost their state pension now have until July 31 to do so at current rates of up to £824 for each year, and less for a part-year gap.

Normally 2016/17 would be the earliest year in which NI records could be filled in during 2022/23, but until the end of July people can fill in gaps all the way back to 2006/07.

Buying state pension top-ups can give a generous boost to retirement income if you buy or fill up the correct years.

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According to the most up to date data available from the Department for Work and Pensions, nearly 3.8 million people – around 34 per cent of those who get the state pension – missed out on the full amount, as of March 2020.

Furthermore, around 805,000 people do not receive the full new state pension, equating to 55 per cent of the nearly 1.5 million people who get it.

They may get less than the full state pension because of gaps, but also if they contracted out of paying additional NI contributions – S2P and Serps – during their working lives.

Jon Greer, head of retirement policy at Quilter, said: ‘The Government made the correct decision to extend the deadline to July. 

Still having issues buying top-ups?

This is Money receives many complaints from readers about the confusing and at times chaotic state pension top-ups system.

A constant issue is the phone gridlock that prevents callers getting through to top up their state pension.

 We flagged the issue with DWP and the deadline was later extended. 

But if you are still having issues please write and tell us your story at [email protected]

 Please put STATE PENSION TOP-UPS in the subject line.

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‘But that new deadline is fast approaching and again it is important to appeal to anyone that might think they have gaps to check and think about filling them if, it is of benefit to them, and they can afford to.

‘Filling these gaps represents one of the best investments you can make. To put it into perspective someone with ten missing years could pay a little over £8,000 to fix the gaps and boost their state pension income by £55,000 over a typical 20-year retirement.’

Generally, the new full state pension is paid out to those who have at least 35 years of NI contributions.

The new state pension can be claimed if you have at least ten years National Insurance contributions and are: a man born on or after 6 April 1951 or a woman born on or after 6 April 1953. If you were born before these dates, you will get the basic state pension instead.

People aged between 45 and 70 who have gaps in their NI record are most likely to benefit from the current concession to buy top-ups all the way back to 2006, and should act now in order to meet the deadline.

Gaps in records can occur due to a variety of reasons such as having been employed on low earnings or unemployed but not claiming benefits.

You can check if you have gaps in your record via the government’s state pension forecast tool on gov.uk.

If you are not predicted to get the full amount of new state pension (currently £203.85 a week) it is worth going through your record for holes.

However, it can be tricky to work out which years you could benefit from, if any, so the Government and money experts recommend checking with the Future Pensions Centre before handing over your cash.

Greer adds: ‘Paying voluntary contributions won’t benefit everyone and it is key to contact the Future Pension Centre on 0800 7310175 who will be able to tell you if paying extra will increase your state pension entitlement. 

‘It could be one of the most fruitful calls you make.’

How much is the state pension now?

The basic state pension is £156.20 a week or around £8,120 a year.  It is topped up by additional state pension entitlements – S2P and Serps – if these were accrued during working years. 

This two-tier state system was replaced for people retiring since 2016 by a new ‘flat rate’ state pension. This is worth £203.85 a week or £10,600 a year.

People who have contracted out of S2P and Serps over the years and retire after April 2016 get less than the full new state pension. 

Workers needed to have 30 years of qualifying National Insurance contributions to get the old state pension, but they now need to have 35 years of contributions to get the new flat rate state pension.

But even if you paid in full for a whole 35 years, if you contracted out for some years on top of that it might still reduce what you get. 

Everyone gets the option of deferring their state pension to get more in their later years. You can check your NI record here.

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