To qualify for a full State Pension, you need a complete National Insurance (NI) record of 35 years. A minimum of 10 qualifying years is required to be entitled to any amount.
If you have a shortfall in NI contributions, it may be worth paying voluntary contributions to fill the gap. Usually, it is only possible to pay for gaps for the previous 6 years. However, men born after 5th April 1951 and women born after 5th April 1953 have until 5th April 2023 to pay for any eligible gaps between the tax years April 2006 and April 2016. This effectively creates a window of 16 years. After 5th April 2023, this will revert to the usual six-year period.
Making voluntary contributions to fill gaps in your NI record is extremely good value for money. Typically, it costs £824 to purchase a full year of NI contributions (although it could be less) and this provides you with an additional £275 of State Pension income each year. Remember that this is payable from State Pension age for the remainder of your life and will increase each year in payment. That means that you would only need to live 3 years beyond State Pension age for you to be better off.
If you already have a full State Pension entitlement, or you are predicted to reach full entitlement by your State Pension age, then this will not apply to you.
It is important to check your State Pension entitlement. You can do this online: www.gov.uk/check-state-pension , or by calling the Pension Service: 0800 731 0175.
More detailed information on the State Pension can be found on our previous blog post: https://beechwoodfs.co.uk/2022/11/04/a-guide-to-the-new-state-pension/
For advice on topping-up your State Pension or your retirement planning, please get in touch.
