4 months left to boost your State Pension entitlement. Here are 3 easy steps to take

As a key deadline falls on 5 April 2025, discover three simple steps that could help you boost your State Pension and enhance your retirement income.

In addition to your private and workplace pensions, your State Pension could provide a valuable income in retirement. What’s more, according to BBC News (10 September 2024) the full new State Pension is set to rise by £460 a year from April 2025 under the triple lock arrangement.

Yet, you might be surprised to learn that entitlement to the new State Pension is not automatic. You need to have enough years of qualifying National Insurance contributions (NICs) on your record to receive the full amount – or indeed, any State Pension at all.

Unfortunately, if you took any breaks in your career – to care for children, for example – you might have gaps in your National Insurance (NI) record, leaving you ineligible for the full State Pension.

If this applies to you, it might be worth making voluntary NICs to boost your State Pension entitlement. However, there is an important deadline approaching on 5 April 2025, which will affect how many credits you can buy.

Read on to find out why you might want to consider boosting your State Pension entitlement and discover three simple steps towards doing so.

You could boost your State Pension by thousands of pounds over your lifetime when you pay voluntary National Insurance contributions

The full new State Pension is £221.20 a week (2024/25) for those who reach State Pension Age after April 2016.

However, you usually need 10 “qualifying years” to receive any State Pension at all, and 35 qualifying years to be eligible for the full amount.

A qualifying year is a tax year in which at least one of the following applied to you:

• You were working and paying NICs
• You were receiving NI credits
• You were paying voluntary NICs.

If there were times when none of these scenarios were true, you may be able to fill any gaps in your NI record by paying voluntary NICs.

Doing so could make a significant difference to your financial future.

According to figures published by Standard Life (20 September 2024), buying a full year of NICs could increase your State Pension by £275.08 a year. As it currently costs £824.20 to buy one year of Class 3 NICs for missed years up to April 2023 (the cost may differ if you’re self-employed), this might not seem like a good return on your investment.

Yet, over time, this additional income could add up to a substantial amount. Indeed, Standard Life calculates that if you start taking your State Pension at the age of 66 and live for another 20 years, your £824.20 investment could add around £5,500 to your retirement income.

Research published by the Times Money Mentor (18 September 2024) further underscores the potential value of a full new State Pension entitlement. Based on current figures, for those retiring after 5 April 2016, the full new State Pension is worth £230,000 over 20 years, and £345,000 over 30 years. This is without factoring in any future increases that could be made due to the triple lock.

A key deadline is approaching if you want to top up your State Pension

Normally, you can only fill gaps in your NI record from the last six years.

However, until 5 April 2025, you may be able to fill any gaps as far back as April 2006, provided you reached State Pension Age after 2016.

This may be a particularly beneficial opportunity for women, who have less on average in their workplace and private pension pots when they retire than men. As a result, if you’re a woman, the State Pension could be an important portion of your retirement income.

What’s more, women may be more likely to have gaps in their NI records due to parenting and caring responsibilities.

So, it’s worth considering whether making voluntary NICs is a suitable option for you, before the April deadline arrives.

3 simple steps for improving your National Insurance record

If you think you may have gaps in your NI record, there are three simple steps you could take to boost your State Pension entitlement.

1. Check your State Pension forecast

The first step is to find out if you’re on track to qualify for the new State Pension and how much you’re likely to receive when you reach State Pension Age.

You can check your State Pension forecast on the government website (28 October 2024), which offers a free online tool that will tell you:

• How much State Pension you are set to receive
• When you will be entitled to claim it
• If and how you could increase your entitlement.

Identifying whether there are any gaps in your NI record and understanding how these might affect your entitlement, could help you make an informed decision about whether to invest in voluntary NICs.

2.  Find out whether you can backdate claims for National Insurance credits

Before you pay any voluntary NICs, it’s worth checking whether you can claim additional NI credits on your record for free.

An NI credit is a way of maintaining your record when you're not paying any NICs.

You may be able to backdate claims for credits if you have a gap in your record as a result of:

• Taking maternity leave
• Caring for an elderly or sick relative
• Looking after grandchildren under the age of 12
• Being unable to work due to illness or injury.

Claims for some credits can be backdated for many years, so it’s sensible to explore this before making any voluntary NICs.

3.  Consider making voluntary NICs

If you can’t plug the gaps in your NI record by claiming credits, you might want to consider making voluntary NICs.

As shown above, doing so could add a significant amount to your retirement income over time.

You might want to consider making voluntary NICs if:

• You’re close to State Pension Age and have gaps in your NI record – This could mean that you won’t have enough time to accrue the required number of qualifying years to receive some or all of the new State Pension.
• You’ve had periods of self-employment when you weren’t required to pay Class 3 NICs – As a result, you may not have enough qualifying years to receive the new State Pension, or you may not be eligible for the full amount.
• You’re not eligible for NI credits – Or you still have gaps in your record, despite topping up with credits.

However, it’s important to be aware that voluntary contributions don’t always increase your State Pension. What’s more, not everyone is eligible to make voluntary contributions. For example, government guidelines (28 October 2024 ) stipulate that married women or widows paying reduced rate NI are not usually permitted to make voluntary NICs.

So, if you have gaps in your NI record, you might benefit from speaking to a financial planner who can help you explore your options.

Get in touch

I have extensive experience helping clients assess their finances and identify the most sensible steps for working towards their retirement goals.

If you’d like to find out more about how I can help you review your State Pension entitlement and plan for your retirement, please get in touch by email lottie@truefinancialdesign.co.uk or call 07824 554288.

Please note

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

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 performance. 

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. 

Workplace pensions are regulated by The Pension Regulator.

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