State pensioners have an opportunity to significantly raise their payments if they respond promptly to an upcoming important deadline. Individuals can make voluntary National Insurance contributions to potentially enhance their state pension, usually limited to within the past six years.
However, for a limited time you can pay contributions as far as the 2006/2007 tax year. Mike Ambery, retirement savings director at Standard Life, part of Phoenix Group, highlighted the potential increase in retirement income, stating: “Doing so could be really valuable and buying a full National Insurance year could work out at around £300 a year in state pension payments or over £5,000 over the course of an average retirement.”
The window for this extended period to top up concludes with this tax year ending in April 2025. Jonathan Orchard, a chartered financial planner and partner at Old Mill, also recommends that older Britons consider topping up their pensions. He outlined the benefits: “Most of the time topping up your state pension proves to be very good value for money.
“In many circumstances it only takes three to four years for individuals to receive more back in the increased payments, against the top up they have made.” He further noted: “Currently the triple lock still applies to the state pension so the top ups are buying into an increasing income stream.”
However, Mr Ambery had a word of caution, urging people to ensure that paying extra NI contributions will serve your best interests before proceeding. He advised: “It’s very important to consider your own situation, as there could be many reasons why voluntary National Insurance contributions wouldn’t suit your circumstances, for example if you have sufficient time to makeup the years without making voluntary contributions.
“There’s not a lot of time left, and this is a big decision to make. Checking your record and contacting the relevant people before next April could potentially mean you’re thousands of pounds better off in future.”
To find out how much state pension you are on track to receive, you can use this tool on the Government website. You can also check if you have any gaps in your National Insurance record using this tool. Mr Orchard urged individuals to act promptly, cautioning: “The phone lines could get busier as the deadline looms but the state pension portal (link above) now allows individuals to work out their ability to top up and then pay, so is more automated than in the past. ”
The full new state pension is currently £221.20 a week, and you typically need 35 years of NI contributions to get the full amount. The full basic state pension is £169.50 a week, and you usually need 30 years of contributions to get this. State pension payments will increase by 4.1 percent next April in line with the triple lock policy.