Background
Back in April 2016, the introduction of the new state pension stipulated that people had to have 35 qualifying years on their National Insurance record in order to gain a full state pension.
People can easily miss these National Insurance (NI) years, for example when experiencing periods of low income, taking a career break or caring for children.
For those who may have missing NI years between 2006 and 2016 there is a time limit to plug any gaps. This is particularly important for older individuals who may not have the opportunity to plug any gaps naturally by future working.
Buying extra years and free NI credits
If you’re unlikely to hit the 35-year contribution requirement for the full state pension, you can ‘buy extra years’ by purchasing additional credits.
The deadline for this was 5 April 2023, then 31 July 2023 and more recently the Government extended the deadline again to 5 April 2025.
To check your NI years total, go to your current national insurance record on Gov.uk.
If you have any gaps, check whether this affects your entitlement to the full state pension.
Some people can qualify for free National Insurance credits – for example, if they had childcare responsibilities or had spent time as a carer. A full list of the eligibility criteria for the free National Insurance credits is available on this area of the Gov.uk site
What’s changing?
From 6 April 2025, the number of extra years you can purchase reduces to just the last six tax years.
Until 5 April 2025, the cost of buying voluntary NI contributions is around £824 per missing year (although 2020/21 and 2021/22 are slightly less). Buying a NI year at £824 adds up to £302 per year (£5.82 per week) to your pre-tax state pension.
From 6 April 2025, it’s not yet clear what the yearly price will jump to. Remember, also from that point, people won’t be able to make voluntary NI contributions for the years before 2019/20.
Get advice
The extended deadline refers to buying credit for the years 2006 onwards. Plugging gaps from earlier years is no longer possible.
Pensions are complex, and it is important to get advice on your individual circumstances. For example, if you were contracted out of the additional state pension, it may mean you aren’t able to benefit from buying NI years.
Contact the Future Pensions Centre (although there can be long waiting times), or speak with an independent financial adviser (IFA) pensions specialist. The Future Pensions Centre will be able to confirm if it is worth you topping up your pension.
If you are already state pension age (and have deferred or are receiving the state pension) contact The Pension Service instead on 0800 731 0469
And, if you would like an introduction to an IFA, please speak with your Shipleys contact.
Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary. If you would like advice or further information, please speak to your usual Shipleys contact.
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