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Aged 45 to 70? Urgently consider buying national insurance years
You may be able to turn £800 into £5,500 in your state pension
Updated 8 June 2022
If you're aged between 45 and 70, you may find that buying extra national insurance (NI) years is the best way to boost your state pension. If you're eligible, the returns can be huge – spend £800 and you could get £5,500 back.
This is thanks to 'transitional arrangements' brought in when the new state pension system started in 2016. But the clock is ticking on how long you have left to do this. Read our step-by-step guide to find out if you qualify and if it's worth it for you.
This is the first incarnation of this guide. Please give us feedback on how the process worked for you in the voluntary national insurance contributions forum thread.
We asked the Department for Work and Pensions to help us check this guide to ensure accuracy, but it wasn't willing to. However, former Pensions Minister Steve Webb (now at Lane, Clark & Peacock) has kindly looked over it and made some suggestions, though – of course – he isn't responsible for any errors.
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Start here: What this is all about
A new state pension system was brought in on 6 April 2016, so most people roughly 70 or under are eligible for it. The maximum amount is currently £185.15 a week. But how much you get depends on how many 'qualifying national insurance (NI) years' you have.
Many will likely need about 35 qualifying NI years, though for those who started their NI record before 2016 – which would be pretty much everyone aged 45 to 70 now – it's not quite that simple. How many years you need is based on your age and NI record up to now – which could mean you need more than 40 NI years.
To make it easier for people on the new system to collect the number of NI years they need to get the maximum amount of state pension, there are 'transitional arrangements' in place. These mean you can pay to plug gaps in your NI record dating all the way back to 2006. Yet this arrangement ends on 5 April 2023, after which you can only fill gaps going back six tax years.
For most who qualify and have the cash, paying to plug NI gaps is a no-brainer that could boost your pension by £1,000s. Though there are lots of 'ifs' and 'buts' that may mean it's not right for you, so let us take you through it step by step.
Important: This guide is for men born after 5 April 1951 and women born after 5 April 1953. Born before that? You're in the wrong place – read our State pension guide instead.
Step 1: Check how much of the full state pension you're on target to get
The first check you need to do is simple, but it's a different check depending on your age:
If you're not yet at state pension age...
You need to use the Government's:
State pension forecast calculator
This will give you two pieces of information:
- How much state pension you'll get based on your current national insurance (NI) record to date
- How much state pension you're likely to get if you work up to your state pension age
If you're not predicted to get the full amount of £185.15 a week, you need to check for gaps in your NI record. There's a link in your forecast to do this, or you can use the link in the box below. Once you've checked your NI record, go to step 2.
If you're already at state pension age...
Here you need to:
Check your national insurance record
That'll show you any national insurance years since 2006 that are 'incomplete'. If you have gaps that you're unlikely to fill by any other means, it could be worth paying to plug these to get a higher state pension. The rest of this guide deals with whether you should and how to do that.
Step 2: If you have gaps in your record, see if you can plug them for free with NI credits
It's not only work that earns you national insurance (NI) years. There are a whole host of activities that can get you a qualifying NI year. Some are given automatically, but others aren't.
If you've been in any of these scenarios in years in which you had gaps in your NI record, you can apply manually for NI credits for that year:
- Statutory sick pay: You are/were on it and not earning enough for a qualifying year.
- Jobseeker's allowance: You are/were eligible for it but not claiming it.
- Employment and support allowance: You are/were eligible for it but not claiming it.
- Caring for a family member: As long as you are/were between 16 and state pension age and the family member is/was under 12 and not your child. Also known as 'grandparent credits'.
- Caring for a sick/disabled person: As long as it is/was for at least 20 hours a week.
- On jury service: You are/were on it and aren't/weren't self-employed.
- Wrongly imprisoned: As long as your conviction has since been quashed.
- A foster carer (or kinship carer in Scotland): As long as it's been since 6 April 2010.
- On statutory maternity, paternity or adoption pay: You are/were on it and didn't/won't earn enough for a qualifying NI year (additional statutory paternity pay also counts).
- Spouse of a member of the armed forces: You're married to, or a civil partner of, a member of the armed forces and went with them on an overseas posting (additional eligibility rules apply here).
- On a Government-approved training course: You are/were on one, are over 18, and weren't sent on the course by Jobcentre Plus.
Full information on how to manually apply for any NI credits you're due is on the Government's national insurance credits page.
There are also a range of scenarios that you build up benefit entitlement automatically, such as being in work and consistently earning over the trigger threshold (£6,396 a year), or claiming certain benefits. See the full list of scenarios where you get automatic NI credits.
Most will have already got any NI credits they're due. But if you haven't, make sure you claim them and then start this process again from step 1.
Step 3: Should you pay to boost your state pension?
Until 5 April 2023, you can buy national insurance (NI) years to fill gaps going back to 2006. When these transitional arrangements end, the number of extra years you can purchase drops down to the last six tax years, so checking now is key.
- Those at or near state pension age will find it relatively easy to see if topping up may help. If your state pension is, or is forecast to be, less than £185.15 a week, and you won't be able to plug gaps by any other means, topping up could be a no-brainer.
- If you're younger, it's more of a toss-up as you may still fill the gaps by other means. The checks above show how many years you already have, and how many are left. If a shortfall is likely and you've NI gaps for 2006 to 2016, you need to decide by the deadline of 5 April 2023 whether to top up.
Though the younger you are, the more time you have to earn the max years through work or NI credits. That's why we've said this guide is roughly for over-45s, or maybe over-50s, as under that you've so many years left until state pension age, it'd be taking a real risk to buy now unless you're sure you won't make them up later (for example, as you live overseas).
Important: If you were 'contracted out' of the additional state pension before 2016, topping up may not help
Much here depends on your NI record from that period and it's difficult to generalise and say who should and shouldn't top up. As it's so complex, it's doubly important to call the Department for Work and Pensions helplines in step 5 to understand if paying to plug any NI record gaps will actually result in you being paid more state pension.
You're more likely to have been contracted out if you worked in the public sector. You can check by looking at a pre-2016 payslip or P60 – if the NI contributions line has D, E, L, N or O next to it, you were contracted out.
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Step 4: Use our calculator to see what topping up could be worth
Buying a full national insurance (NI) year costs £824, unless:
- You're topping up the two most recent tax years, in which case it's about £20 to £30 cheaper
- You're self-employed, or
- You're topping up partial years, in which case it'll cost less to upgrade it to a full year
Use our calculator below to see how much buying NI years could be worth, then look at our life expectancy tables to work out if you'll likely live long enough to benefit.
How much could it be worth?
The maths is simple. A full NI year usually costs £824 and adds up to £275 each year to your pre-tax state pension. Get this maximum gain and it's worth it as long as you live at least three years after getting your pension (or three years after you top up, if you're already getting it).
Note that you can't pay to increase your state pension beyond the maximum of £185.15 a week, so if you're projected to get £180 a week or more, topping up is less good value for money.
Our calculator gives an indication of the maximum amount buying different numbers of NI years could be worth in today's money (though it's possible to see less or no gain)...
How long are you likely to live?
The potential gains to be made from buying voluntary NI contributions are huge. But one of the factors it depends on is if you'll live long enough to gain. Consider your health and use our life expectancy tables below to see if you're LIKELY to benefit.
Using data from the Office for National Statistics life expectancy calculator, the tables show how many more years people in different age groups can expect to live on average...
How long you're likely to be getting the state pension
Current age |
Age at which you qualify for the state pension |
Average life expectancy |
40 |
68 |
87 |
45 |
67 |
87 |
50 |
67 |
87 |
55 |
67 |
87 |
60 |
67 |
87 |
65 |
66 |
87 |
70 |
You were eligible at 62 |
88 |
75 |
You were eligible at 60 |
89 |
80 |
You were eligible at 60 |
90 |
Life expectancy data provided by the Office for National Statistics.
Current age |
Age at which you qualify for the state pension | Average life expectancy |
40 |
68 |
84 |
45 |
67 |
84 |
50 |
67 |
84 |
55 |
67 |
84 |
60 |
67 |
84 |
65 |
66 |
85 |
70 |
You were eligible at 65 |
86 |
| 75 | You were eligible at 65 | 87 |
| 80 | You were eligible at 65 | 89 |
Life expectancy data provided by the Office for National Statistics.
To ensure you're not wasting money, you have to claim state pension for at least three years after making voluntary NI contributions to break-even. The graph below shows how likely people of different ages are to claim state pension for at least that long. For example, 95% of men who are currently aged 65 will live long enough to claim state pension for three years or more.
Note: If you've already reached state pension age, the graph shows how likely you are to claim state pension for at least a further three years. Data provided by the Office for National Statistics.
Step 5: WARNING – don't pay until you've called the Government's pension helplines
We've given you a rough idea of how this works. But there are many complexities, so the only way to know for sure if this is likely to benefit you is to get personalised information from the Future Pension Centre or the Pension Service.
Both services provide specific information about your current national insurance record. They'll tell you whether doing so will actually result in any increase to your (eventual) state pension. It is possible to pay to plug a gap and see no gain, which is why this step is so important.
If you're not yet at state pension age...
You need to:
Contact the Future Pension Centre on 0800 731 0175
It's free to make the call (though if you're here from our weekly email, it's best to give it a few days in case a lot of people are trying to get through). The lines are open between 8am and 5pm Monday to Friday. Full contact info's on the Future Pension Centre pages.
If you're already at state pension age...
If you've deferred your state pension or are already claiming it, you need to:
Contact the Pension Service on 0800 731 0469
It's free and phone lines are open between 8am and 5pm on Monday to Friday. See full Pension Service contact info.
Step 6: A few buts... not everyone will be better off if they buy more NI years
The Future Pension Centre or the Pension Service can tell you if paying for extra national insurance (NI) years will increase your state pension entitlement. But you need to think about the bigger picture, as a larger state pension may have a detrimental effect on other parts of your financial life, and the Government's pension services can't help you with that. Think about:
- If you're likely to have a low income and will only rely on state pension, pension credit may cover the gap. Pension credit is a top-up for people of state pension age who don't have a certain basic level of income. That can include topping you up to roughly the equivalent of what you get in the full state pension. So if you have no other savings or assets and are likely to be only relying on your state pension or a little more, there is a risk that by paying to top up now, you could have got the same with pension credit.
It should be noted though, especially if you're trying to future-proof the years ahead, there's no guarantee that pension credit will still exist, be at the same level or have the same eligibility criteria. So if you'll benefit from topping up now by paying for NI years (and can afford to), that is a more certain outcome. See our Pension credit guide for more info.
- The gains from buying extra years may be reduced if it pushes you into a higher tax bracket. If you were to be near the threshold of either paying tax or hitting the 40% tax bracket once your state pension and other income is combined, you will pay (more) tax on your pension income if that income increases.
This will mean it takes longer for you to break-even on any voluntary NI contributions you make – though it's likely to still be worth doing, even with this. Check out the latest tax rates and try our Income Tax Calculator to see if this might affect you.
How to buy missing NI years
If the Future Pension Centre or the Pension Service has said buying additional national insurance (NI) years would result in extra income and you've made the decision to top up, you now need to decide how many NI years to buy. To find out how much topping up would cost and to get your 18-digit reference number, you'll then need to contact HMRC.
Do note you don't need to buy all the NI years you want in one go – you could buy some now and some later in the year if that suits your cash flow better.
You'll need an 18-digit reference number so the payment's added to the correct NI record, and you need to get this by contacting HM Revenue & Customs (HMRC). They can give it to you over the phone (by post takes around 15 working days). Once you have it, you can pay through your bank or building society, online or in branch, to this HMRC bank account. You can also pay by cheque, though HMRC says this takes longer to process.
If you're not yet claiming state pension, the payment can take up to 60 working days to process, after which you should see your NI record change to acknowledge the voluntary contributions you've made.
If you're already claiming state pension, HMRC will notify the Department for Work and Pensions (DWP) that you've done so, and prompt DWP to carry out a benefit review, so your payments won't increase straightaway. However, DWP will backdate the increase to the date you made the payment (NOT to the date you started claiming state pension).
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