UK State Pensions: Later deadline for NI top-ups that could mean an extra £55,000 | State Pensions

Pay £800 now and if you live long, get back a total of £5,500. If you can afford to hand over £8,000, it could be £55,000 or more. Put simply, that’s the pension deal that’s being offered to many people by the government, experts say.

The deadline to claim the so-called ‘bargain price’ was originally supposed to be April 5, but the good news is that this week the government extended that deadline to the end of July.

This is all about topping up the state pension, which may sound tedious and complex but can yield a better return than almost any other way of using your savings, says former Pensions Secretary Steve Webb, now a partner in LCP actuarial business.

Anyone who has worked abroad, earned little or had gaps in employment should be particularly careful.

Those eligible have until July 31 to act after the government decided to give people more time to respond to a “surge” in the number of people contacting them. There were reports of blocked phone lines.

Many people are unaware that by paying voluntary National Insurance (NI) contributions, they can earn money to fill previous gaps in their NI record and increase their state pension entitlement.

Under the new State Pension Scheme introduced in April 2016, you generally need 35 years of NI contribution records to qualify for the full amount of State Pension, which is currently £185.15 per week.

Deductions are made for missing years, but if you have gaps in your record, you can fix this situation. According to the usual rules, it is only possible to fill gaps in your NI dataset up to six years after the year in question. So normally you can only go back to 2016/17 at the moment.

However, for a limited period of time, humans can go back much further, filling in gaps for each year from 2006-07 – an additional 10 years. This benefit only applies to persons covered by the new statutory pension system: persons who have reached or will reach the statutory retirement age after April 5, 2016.

As investment platform AJ Bell puts it, this scheme offers “an annual income increase of £275 for just £824”.

To top up your state pension, you usually have to make voluntary Class 3 NS contributions. The current cost of this is £15.85 per week or £824.20 per year.

This one-off payment can be up to 1/35th of the full rate of your future state pension. As the full new state pension is currently £185.15 a week, that increase is worth £5.29 a week, or £275 a year.

Suppose you decide to add 10 missing contribution years from 2006-07 to 2015-16 inclusive. You would have to give up £8,242 (10 lots of £824.20). But in return for that payment you would receive an annual state pension increase of £2,750. That would add up to around £55,000 (before tax) over the course of a 20-year retirement, Webb says.

In addition, according to AJ Bell’s Tom Selby, the earnings are protected by the triple lock as it stands. For example, the state pension will increase by 10.1% in April this year, in line with September 2022 inflation.

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So using the previous example, your total winnings could actually be a lot more than £55,000 when you factor in inflation. And the longer you live, the more pounds you’ll have.

Webb says some people have gaping holes in their NI record and this will be their last chance to fill them, adding: “Failing to do so could cost some workers thousands of pounds.”

But Webb says anyone thinking of increasing their state pension for those earlier years should check with the Future Pension Center at the Department of Works and Pensions. Because there are situations in which paying historical contributions would not supplement your state pension.

If you are under the state pension age, the first thing you should probably do is find out more about your situation by checking your state pension forecast online: go to

Remember, the younger you are, the more likely you are to build up your premium balance over time in the normal way, which means buying extra years now could be a waste of money.

Of course you have to have money to be able to afford it. And not everyone will warm to the idea of ​​using today’s cash – which they may need for bills – to buy income for later, especially when they don’t know how long they’ll live.

AJ Bell says that by and large, anyone who increases their state pension on these terms must live at least three to four years from the start of the payment to benefit from the deal. It adds that those with a reasonable chance of living into their 90s, those in good health who can top up their state pension “could benefit significantly.”

If you decide to proceed, there are several ways you can pay. More information can be found on the government websites on this subject.

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