The pension experts at Standard Life have warned that “many” Brits are not aware that their National Insurance payments dictate how much state pension they get
Brits have been urged to check whether they could add a £6,000 boost to their state pension.
The pension experts at Standard Life have warned that “many” Brits are not aware that their National Insurance payments dictate how much state pension they get. Currently, you get the new full state pension when you have 35 years’ worth of pension (NICs) although some people will need more than this. You normally need 10 years to get any state pension at all.
If you have gaps in your record, you could receive less than you thought. Standard Life has urged Brits to take a look at their state pension forecast and check their National Insurance records. Mike Ambery, retirement savings director at Standard Life, part of Phoenix Group, said: “We encourage everyone to check their contribution status, and to get a state pension forecast, as the payment is a vital source of income in retirement for millions. Yet many people are unaware that to receive the maximum payment they’ll need 35 years of National Insurance contributions.”
The call to action comes after a new HMRC and Department for Work and Pension (DWP) tool was launched to allow people to check if they can increase their state pension payments by paying voluntary national insurance. This tool allows you to buy National Insurance years online to fill gaps in their record.
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According to Standard Life, based on the 2024/25 rates, buying one full National Insurance year could boost the new state pension by £303 a year. Mike added: “Someone starting to claim at 66 and living for another 20 years could see their State Pension increase by around £6,060 as a result of making the additional payment.”
However, before voluntarily buying National Insurance years, Standard Life says you should always check whether you are eligible to claim National Insurance Credits first. You can claim these for a range of things such as if you getting statutory sick pay, claiming certain benefits, or was receiving maternity allowance. Alongside this, you should check whether buying the years would actually benefit you overall. For example, you will reach 35 years of contributions in your working lifetime so don’t need to pay for extra years.
Mike explained: “It’s very important people consider their own situations, as there could be many reasons why voluntary National Insurance contributions might not suit people’s circumstances, such as if they have sufficient time to make up the required number of years. HMRC’s new online service should help people quickly and easily see if it’s the right decision to make.”
You can currently buy back missing National Insurance years dating back to 2006 and a top-up for a missed qualifying year currently costs £824. This will change in April 2025, when you will only be able to go back six years.
