State pensioners have been urged to check if they could boost their payments by £2,750 in what has been deemed “one of the best returning investments”.
You can potentially increase your state pension entitlement by topping up your National Insurance record, should you have gaps in your contributions.
A person typically needs 35 years of contributions to get the full new state pension, currently paying £221.20 a week. Now is a great time to check if you have any gaps in your record that you can fill in, as currently you can do so over an extended period.
Usually you can only voluntarily pay contributions up to six years ago but at present this is extended by another 10 years, as far back as the 2006/2007 tax year.
Thomas Forrester, trainee financial planner at BRI Wealth Management, spoke about the sizeable increases you can get by topping up.
He explained: “Any gaps in your record from 2006 to 2023, can be bought back at a cost of £824.20 per year (based on 2022/23 rate).
“Each extra year could increase your state pension by £275 per year, so over 10 years of retirement, that’s an additional £2,750 in total making this one of the best returning investments out there.”
You would actually likely accrue even more than this over the 10-year period, as state pension rates increase each year in line with the triple lock. Payments are increasing 4.1% this April, with full new state pension rising to £230.25 a week.
The policy ensures an increase to the state pension each April in line with the highest of inflation, the rise in average earnings or a minimum of 2.5%.
However, the opportunity to top up over this extended period ends in less than two months, with the end of this tax year. Mr Forrester urged: “With the April 5 2025 deadline approaching, check your NI record and fill any gaps. Missing the deadline may mean you lose the opportunity permanently.”
The state pension age is currently 66 for both men and women, although this is increasing to 67 and then 68 over the coming years. Mr Forrester pointed to some other pensions-related deadlines in April.
He warned: “Failing to use your pension allowance before April 5 could mean missing out on thousands in pension contributions and valuable tax relief. The annual pension allowance is the maximum amount you can contribute each year while still receiving tax relief.
“It is currently £60,000, but you cannot contribute more than your total ‘relevant earnings’ in that tax year.” You can carry forward unused pension allowances from the previous three tax years.
But there are some rules to note about how this works. Mr Forrester said: “You must first use this year’s allowance before accessing past allowances, and your contributions are still limited by your earnings.
“If you wait too long, you may not earn enough in future years to catch up, meaning you could miss out on both contributions and tax relief that can’t be reclaimed.”
