Act now to maximise your state pension entitlement!

What’s the issue?

If you have a gap in your National Insurance record for a particular tax year, it is sometimes possible to fill that gap by making voluntary National Insurance contributions. This can be really important for some people, as your National Insurance record has a direct impact on the amount of state pension you will receive.

It is usually only possible to make voluntary National Insurance contributions for the past six tax years. However, for a limited time, certain people are able to pay voluntary contributions going back as far as the 2006/07 tax year. This is only possible until 5 April 2025. Note this deadline has already been extended twice and we understand the 5 April 2025 deadline is a hard deadline.

From 6 April 2025, the normal rules will apply and so you will only be able to make voluntary contributions going back six tax years.

Who can make these extended contributions?

This extended facility only applies to people who reached, or will reach, state pension age on or after 6 April 2016. This means they are under the ‘new’ state pension system. This applies to:

• men born after 5 April 1951 or
• women born after 5 April 1953.

There is more information about the new state pension on our website.

How does your National Insurance record affect your state pension?

To be eligible to claim a state pension, you need to have a certain number of ‘qualifying years’ for National Insurance purposes. To get any new state pension, you will need to have a minimum of 10 qualifying years on your National Insurance record. To get the maximum new state pension, you usually need to have 35 qualifying years.

You can read more about this in our website guidance.

  In some cases, you might need more or less than 35 qualifying years to get full state pension entitlement. This is sometimes the case where you accumulated qualifying years under the old basic state pension system. You can find out how many qualifying years you need by checking your state pension forecast. We explain how to do this later in this article. 

What is a qualifying year?

A ‘qualifying year’ is a tax year where:

• sufficient National Insurance contributions (NIC) have been paid (or have been treated as paid), or
• where you have received National Insurance credits for all 52 weeks of the tax year, or
• you have combination of sufficient contributions and credits that cover the whole tax year.

We explain the different classes of National Insurance contributions and National Insurance credits on our website.  Some typical examples of how qualifying years are ‘banked’ include:

• A self-employed person pays (or is treated as having paid) 52 weeks of class 2 NIC in the tax year
• Someone is claiming child benefit for the full tax year – this provides 52 weeks of class 3 National Insurance credits
• A person with a regular salary from a single employer for the whole tax year earns at least the ‘lower earnings limit’ – which is £6,396 in the 2024/25 tax year.
• A person stops self-employment part way through the tax year, and then immediately starts claiming universal credit the same week they cease trading. Provided they paid, or were treated as having paid, class 2 National Insurance for all weeks up to the date they stopped trading, then the rest of the tax year where they claim universal credit will be covered by class 3 credits.

Note that the position can be complex for some lower-earning employees with fluctuating income/multiple jobs. We have more information about this in our guidance.

How do voluntary National Insurance contributions work?

There are two types of voluntary National Insurance contributions:

• Class 2 contributions – these are currently £3.45 per week
• Class 3 contributions – these are currently £17.45 per week

You can usually only make the cheaper class 2 contributions if you were self-employed for the period in question, or in other limited circumstances where you were working overseas. For everyone else, the only option is to make class 3 voluntary contributions.

The rate of weekly voluntary contribution you pay to fill a tax year might be less than the rates shown above, depending on the tax year that is being paid. The online system will calculate this for you. In recent tax years the cost of class 3 contributions was slightly lower than £17.45. For those able to fill gaps between 2006/07 and 2019/20, the weekly class 3 contribution rate was £15.85, or £824.20 for a whole year.

  If there is a gap in your National Insurance record for a particular tax year (or several tax years), then you should only need to make voluntary contributions for the particular weeks that were not covered by contributions or credits. You might not need to pay voluntary contributions covering the whole tax year in order to fill the gap and secure a qualifying year. The online system should show you the options and calculate the amount you would need to pay, based on your circumstances, to make a tax year ‘qualifying’.

What can you do now?

If you want to check your National Insurance record and understand if you might need to make voluntary contributions, then here are some steps that might help:

Step 1 – check your National Insurance record

You can check your National Insurance record in your online HMRC Personal Tax Account or via the HMRC App. To access these services you will need to have a Government Gateway account.

When you log in, you can click on the tile to view your National Insurance record. This will show you all tax years going back to 2006/07, and next to each will either say ‘Full year’ or ‘Year is not full’.

If you have years that are not full, you should then see a green button that says ‘view payable gaps’, which should give you more information about your state pension forecast and what you can pay to fill any gaps.

If you are unable to access HMRC’s online services, then you will have to contact the Department of Work and Pension’s Pension Service or Future Pension Centre to get this information, see step 3 below.

Step 2 – consider the options presented

If you are able to access your online National Insurance record, then it will set out any options for paying to fill gaps in your record. Note that if you pay voluntary contributions by mistake, getting a refund might not be straightforward.

When looking at these options, it is important to think about:

• Do you already have sufficient years? If so, making more contributions won’t increase your entitlement.
• Do you think there are any errors in HMRC’s records? If so, contact them.
• Might there be any opportunity resolve the gaps in your record for free? For example, this might be the case if you have Home Responsibilities Protection missing from your record, or perhaps you are entitled to unclaimed National Insurance credits.
• If you have already reached state pension age, how will the weekly increase to your entitlement compare to the upfront cost of the voluntary contributions? In some instances, the cost may not be worth it. Remember you can’t pass on your state pension to beneficiaries after death.
• Might the increase in state pension mean you are worse off if you then lose entitlement to pension credit?
• If you have not yet reached state pension age, how far from state pension age are you? Do you expect to keep working or claiming National Insurance credits that might mean you will catch up on the lost years?

Depending on how many years are showing as ‘not full’ there might be various options presented, and you might feel you would prefer to understand these options better before committing to a payment. You may wish to seek help from the Department of Work and Pensions (DWP) to understand your options more fully.

  Because of potential complexities in cases where you might be able to use class 2 rather than class 3 contributions, some people will be required to approach the DWP to discuss their options, instead of being able to pay voluntary contributions through the online system. This will be determined by the answers you give to a short eligibility questionnaire at the point you try to make payment. 

Step 3 – contact the DWP (or request call back)

As mentioned, there are several reasons you may need to contact the DWP, such as:

• You are unable to access your National Insurance record online.
• You wish to speak to someone to better understand your options.
• You might be eligible to pay class 2 voluntary contributions.
• You are having some other difficulty related to your voluntary contributions.

If you have already reached state pension age, then you should contact DWP’s Pension Service.

If you have not yet reached state pension age you should contact DWP’s Future Pension Centre.

Both services can usually be contacted by telephone, however, given the large number of people trying to make voluntary contributions before the 5 April 2025 deadline, there is now a call back option. There is an online form to request a call back available on GOV.UK.

Due to the high demand, you might need to wait as long as 8 weeks for a call back.

  The DWP have confirmed that if you submit a call back request before 5 April 2025, then you will be able to make contributions back to 2006/07, even if the deadline has passed by the time you hear from them. When you send your request, you should take a screenshot of the confirmation and then wait for the call – they have requested people do not submit multiple requests or chase for an update while they are working through the high volume of cases.

Closing comments

Remember that the option to make contributions for the tax years 2006/07 to 2018/19 (inclusive) will no longer be possible from 6 April 2025, other than in cases where a call back request has already been submitted.

It is therefore important that you check the position now and think carefully about the options – even if your state pension feels like a long way in the future.

If you are already drawing your pension and decide to increase your entitlement by making use of this extended facility, then bear in mind that it might take a short while for the DWP to put the uprated entitlement into effect.

Because the state pension is taxable, you will also need to check that the updated state pension entitlement is accurately reflected for tax purposes – for example in any PAYE coding notices, or tax calculations you receive from HMRC. In theory, HMRC should receive the updated information automatically, but it is a good idea to check. Please also ensure you understand that as well as more tax, a higher state pension might impact on any means tested benefits you are receiving, such as Pension Credit.

You can read more about voluntary National Insurance contributions and your state pension on GOV.UK.

You can also read further information on the MoneySavingExpert website.