State pensioners could boost their payments by £5,000 if they act now with an important deadline just months away.
You can pay voluntary National Insurance (NI) contributions towards your state pension, usually only as far back as six years ago, but currently you can do as far back as the 2006/2007 tax year.
Mike Ambery, retirement savings director at Standard Life, part of Phoenix Group, explained how much toppping up could boost your retirement income.
He said: “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 deadline to buy NI contributions over this extended period is the end of this tax year, in April 2025.
Jonathan Orchard, chartered financial planner and partner at Old Mill, has also urged older Britons to look at topping up.
He explained: “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.
“Currently the triple lock still applies to the state pension so the top ups are buying into an increasing income stream.”
However, Mr Ambery urged people to make sure paying NI contributions is the right choice for them before they get their wallet out.
He said: “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 make up 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.”
You can check how much state pension you are on track to receive using 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 encouraged people to act sooner rather than later, warning: “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 4.1 percent next April in line with the triple lock policy.
