Making Up A Shortfall

Millions of people have less than 12 months to decide if it’s worth paying extra National Insurance contributions to boost their state pension by filling gaps in their record. A special rule allowing gaps as far back as 2006/7 to be filled expires on 5 April 2025. After that, only gaps from 2019/20 will be fillable. The rule only applies to people on the new state pension – men born on 6 April 1951 or later, and women born on 6 April 1953 or later. Older people get the old state pension and it’s now too late for them to fill any gaps.

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You need 35 years of National Insurance contributions to get a full new state pension. If you have fewer, you will get a reduced pension – for example, for 21 years you’ll get 21/35ths, or 60% of a full pension – and none at all if you have fewer than ten years. National Insurance contributions are paid if you work, and can be given as credits for people on various benefits (search gov.uk for “national insurance credits”). Be aware, also, that reduced rate contributions paid by some married women do not count towards a pension, and years they were paid cannot be boosted now. If your pension is reduced even though you have 35 years’ contributions, you may be able to boost it by filling gaps for years from 2016/17 to the year before you reach the age of 66. Contributions for each tax year you fill from 2006/7 will cost you £824.20, and for each year paid you will get extra pension of £6.32 a week (£328.64 a year) at current rates, from the date you pay. So the payback time for the cost of the contributions is about two and a half years, but just over three if you pay basic rate tax, more at higher rates.