Improve your state pension

If you have gaps in your NICs payment record, you may not receive the full state retirement pension.

You can easily check your NICs record for your entire working life in your personal tax account (www.gov.uk/personal-tax-account ). You need at least 35 complete NICs years to receive the maximum state retirement pension. At least 10 completed NICs years to receive any of the state retirement pension. 

This can come as a shock when you reach state retirement age. However, by that time it is often too late to fill the gaps. If your NICs record is not complete, do investigate the reason for the apparently missing contributions. You should ask HMRC to check for NICs credits. Due to you for periods when you were not working but were claiming benefits, including child benefit. We can help you with this. NICs credits should have been given automatically for these periods. Where there is a genuine gap in your NICs record, you can normally pay voluntary contributions to fill in the missing weeks for periods in the last six tax years.

 However, currently there is a special dispensation that allows women born after 5 April 1953 and men born after 5 April 1951 to complete gaps in their NICs records right back to 6 April 2006. You can pay the voluntary NICs at the 2022/23 rate of £15.85 per week instead of the current rate of £17.45 per week. This opportunity to make up these old years with voluntary NICs payments was due to close on 31 July 2023. On 12 June this was extended to 5 April 2025

Things to know about the state pension

1. Eligibility Age: The age at which you can start receiving the state pension is known as the “state pension age.” This age has been gradually increasing and varies depending on your date of birth and gender. It is linked to life expectancy and may continue to change in the future.
2. National Insurance Contributions: To qualify for the full state pension, you need to have paid a certain number of National Insurance contributions over your working life. These contributions can come from employment, self-employment. However  credited contributions in cases where you were unable to work or were not working. You can check your National Insurance record to see if you’ve met the eligibility criteria to improve your state pension.
3. State Pension Amount: The amount of state pension you receive depends on your National Insurance record. The full state pension amount is adjusted each year, and the actual amount you receive may be higher or lower than the full amount, depending on your contributions.
4. Pension Credit: If you reach the state pension age but have a low income, you may also be eligible for a means-tested benefit called Pension Credit. This benefit provides additional financial support to top up your income.
5. Additional Pensions: Some people may also have additional state pensions, such as the State Second Pension (previously known as SERPS) or the new State Pension (introduced in 2016). These additional pensions are based on earnings and may provide extra income on top of the basic state pension.
6. Private Pensions: Many people also have private or workplace pensions in addition to the state pension. These pensions are typically funded through contributions made by the individual and/or their employer during their working years.

It’s important to plan for your retirement and understand your entitlements under the UK state pension system. You can use the government’s online tools to check your state pension age, estimate your state pension amount, and track your National Insurance contributions. Additionally, seeking advice from a financial advisor can help you make informed decisions about retirement planning and ensure that you have a comfortable and secure retirement.