The next couple of months could be critically important to everyone who is looking to get the most they can from their State Pension. There is a limited window until 5th April 2025 to make top up contributions to fill in any gaps in your state pension record.

Until 5th April 2025 you could be able to fill in years as far back from 2006-2016 where you have not had a full qualifying year of Class 3 NIC Contributions. After this date you will only be able to fill in any gaps from 2017 onwards.

Some Basics regarding The State Pension

Generally speaking, to start receiving any form of state pension you need to have had approximately 10 qualifying years of NIC contributions. If you have over 10 qualifying years you may expect to receive £63.20 a week, or £3,286.40 a year.

Generally speaking, to obtain a full state pension you need at least 35 qualifying years of NIC contributions. If you were to receive the full state pension, you would be receiving £230.25 a week, or £11,973 a year.

Under the current triple lock, the new State Pension increases each year by the highest of the following.

• earnings – the average percentage growth in wages (in Great Britain)
• prices – the percentage growth in prices in the UK measured by the Consumer Prices Index (CPI)
• 2.5%

This offers significant protection for pensioners that their income will grow over time and should at keep pace with, or exceed, inflation.

How to check your historic contributions?

You can check your number of qualifying years by logging into your Government Gateway account. This will tell you the total number of years you have already accumulated and will allow you to view a breakdown of any years you are missing and how much it will cost to fill in the gaps. Sign in using Government Gateway - Government Gateway - GOV.UK

What are the costs and benefits of making additional contributions?

The cost of filling each gap depends on the amount of National Insurance already paid in that tax year. Generally speaking, this will rarely cost more than £824 per year. Each extra qualifying year will give you up to £6.32 more a week (£328.64 a year) when you retire, before any annual increases from the triple lock.

In short, this means you would only need to have receive 2.5 years of state pension before you have broken even on the cost of the voluntary contributions.

Any Restrictions?You cannot pay voluntary contributions if you:

• do not have gaps in your National Insurance record - unless you’re getting Class 3 credits and are eligible to pay Class 2 contributions
• are a married woman or widow paying reduced rate National Insurance
• have passed the deadline for paying contributions for the period that has gaps

Other ConsiderationsWhat you are forecast to receive today is based on current laws and legislation. This can be subject to change and there is no guarantee that what you are projected to receive today, is what will be delivered in the future. This is more likely to affect those who are still several decades away from being able to receive a state pension than those who are only a few years away.Depending on your personal circumstances you might not necessarily be better off through making additional contributions or the benefit you are likely to receive will be more limited than others. For example, factors such as how long you expect to live for, what tax bracket you fall in and weather you’d be entitled to other forms of benefits in retirement may impact to what extent, if at all, making additional contributions makes sense for you.

For further information and support, please contact us.