Government launches new state pension top up service

Those who have gaps in their National Insurance (NI) contributions can now top up their entitlement using a new government-backed online service.  

The new payment service from HM Revenue & Customs (HMRC) and the Department for Work and Pensions (DWP) lets people see any gaps they have in their NI record and enables them to pay voluntary contributions to plug any holes so that they can access their state pension in full.  

Historically, people have only been able to make voluntary contributions covering the past six years, but last year the Government extended this temporarily, meaning that anyone can make up NI gaps between April 6, 2006 and April 5, 2018. This temporary service will be available until April 5, 2025 as things stand.  

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How can I access my state pension? 

In order to get access to a state pension when you retire you are required to pay at least 10 years’ worth of National Insurance Contributions (NICs). And for those wanting to claim the full amount of their state pension, which currently pays up to £221.20 a week (£11,502 a year), 35 years’ worth of NICs are needed.  

Although widely agreed to be insufficient to cover sometimes even the basic cost of living alone, the UK state pension is nevertheless important to understand as currently it is a guaranteed source of income in retirement, provided you’ve made enough NI contributions. Additionally, due to the ‘triple lock guarantee’, the state pension currently  increases each year in line with Consumer Price Index (CPI) inflation, average wages or by 2.5%, whichever is higher.  

Plugging the gaps

Anyone can have gaps in their NICs. If you were unemployed, took time out to raise a family, in education or even if you were not earning enough, you may have periods where no NIC payments were made.  

As mentioned, you need to have been paying NIC for at least 10 qualifying years in order to receive any kind of state pension, and you need to have been paying for a full 35 years to receive the full amount possible.  

The new Government online service allows anyone to view their current state pension entitlement and to make up NI gaps between April 6, 2006 and April 5, 2018. But this opportunity is only available for a short period as you only have until April 5, 2025. This means that if you want to receive your full state pension and you have gaps going back further than six years, now is the time to think about plugging those gaps by purchasing missed years.  

About National Insurance Contributions 

National Insurance (NI) is an umbrella term for universal health care, unemployment benefits and the public pension program.

National Insurance Contributions (NICs) are a form of tax that employees and employers pay to the Government through payroll deductions. NICs are paid automatically through the PAYE (Pay As You Earn) system, which deducts an amount based on a percentage of your income, and this generally continues until you reach retirement age. Employees are able to make additional voluntary payments to increase the pension amount that they will be entitled to receive.  

NICs are generally considered to be collected in order to fund various state benefits, such as the NHS and state pensions.  

If you are thinking about your options at retirement, you can book a free non-committal initial consultation where you can discuss your plans with one of our accredited advisers who will be happy to guide you through the process. Alternatively, you can give us a call on 0333 323 9065 to get in touch with a member of our team to find out more.

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

This article is based on our understanding of Government practice as at 6 April 2024.