Aged 40 to 73? Urgently consider buying National Insurance years
You may be able to turn £800 into £5,500 in your State Pension
There is a potentially unbeatable opportunity everyone aged 40 to 73(ish) needs to consider. You've got until 5 April 2025 to buy back any missing National Insurance years from 2006 to 2016. This can be prove very lucrative, as some are on course to make over £50,000 in boosts to their State Pension by following this guide.
– Under 40? Go through the exercise anyway. While it is more marginal to check if it's worth topping up, you may find a partial year worth buying.
– Aged between 70 and 73(ish)+? This is for men born after 5 April 1951 (currently aged up to 73) and women born after 5 April 1953 (currently up to 71). Born earlier? You're on the old State Pension, so this doesn't apply.
Why National Insurance years matter
The full 'new' State Pension is currently £221.20 a week – however, how much you receive depends on how many 'qualifying' full National Insurance (NI) years you have. Most collect NI years through working and paying NI, but you can also get them if you're claiming benefits or caring for others (if you're not sure what this is about, see how the new State Pension works).
In general, you need around 35 full NI years to get the maximum State Pension, though some will need a lot more (we've seen examples of people needing 44+ years) depending on your age and NI record up to now.
There is a strict time limit on buying back years. Normally you can buy back up to six years, but when the 'new' State Pension was introduced, transitional arrangements were put in place to let you plug gaps all the way back to 2006.
This was due to end on 5 April 2023, and then 31 July 2023, but because so many people were trying, the necessary government phone lines got clogged up (mainly due to Martin shouting from the rooftops about it). So the date has been extended to 5 April 2025. The process isn't always quick though, so if it's something that could work for you, don't leave it too late.
This is big money. It's the most lucrative thing many under the age of 73 can do, and some gain £10,000s, like Martine...
After listening to Martin's podcast, I checked my NI contributions and found I had eight years missing! I've now paid six years and will pay the next two years when possible. This has made a difference of about £49 a week, which is considerable! I'd never have known without the podcast! Thank you.
- MoneySaver Martine
To put that in context, Martine paid up to £5,000 (it may've been far less) to increase her State Pension by £2,550 a year. If she lives for the typical 20 years after state pension age, that'd be a total uplift of around £51,000... and it's inflation-proofed.
So, for some, paying to plug NI gaps is a no-brainer that could massively boost your pension. Yet there are lots of 'ifs' and 'buts' that could mean it's not right for you, so below we'll take you through it step by step.
Beware: If you'll retire with no other pensions or sources of income, then boosting your State Pension might not be worth it
There is effectively a minimum-income guarantee for pensioners, called Pension Credit, though it has to be claimed. It tops up low-income pensioners' incomes to £218 a week (or more if you have caring responsibilities or a long-term health condition). Importantly, it's also a gateway to accessing other benefits, such as the Winter Fuel Payment and a free TV licence (if you're over 75).
When we talk about income here, we mean any income – from state or private pensions, work, or income from savings or investments (above £10,000). Many people in a position to buy extra NI years won't qualify for Pension Credit. However if the State Pension is likely to be your only income, it's worth thinking about.
If you're not on course to get the full amount of £221 a week, or you already claim Pension Credit but you're thinking about topping up, you could find that buying additional NI years could push you over the Pension Credit threshold – and that losing those 'extras' could actually leave you worse off.
It's not always easy to work out because the income thresholds for Pension Credit vary depending on your personal circumstances, as well as any partner's income (and there's no future guarantee that pension credit will still work in the same way or even exist when you come to retire). But if State Pension will be your only income, and you're thinking of topping up, you should consider getting additional bespoke guidance on this, for example from Citizens Advice.
Crucially, you WON’T get this guidance if you call the Future Pension Service.
Step 1: First watch Martin's NI record video explainer
Watch Martin explain how this works in more detail below before tackling the steps to see if it's something you need do (or if radio's more your thing, you can listen to him explain it on his BBC podcast).
This video is from ITV's The Martin Lewis Money Show Live, which was broadcast on Tuesday 13 June 2023.
Step 2: Check whether you're missing any NI years since 2006
The first two checks you need to do are simple:
Here you need to:
Check your National Insurance record
This shows your full National Insurance record. And for each year since you were 16, it will either say 'Full year' or 'Year is not full'. The 'View details' link will give you more information.
If you have 'non-full' years since 2006, 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.
CHECK 2: If you have missing years, then get your State Pension forecast...
You need to use the Government's:
State Pension forecast calculator
This will give you two pieces of information:
- How much State Pension you'd get based on your NI record to date.
- A forecast of how much State Pension you're likely to get if you work up to your State Pension age.
If your forecast ISN'T for the full £221.20 a week, and you have gaps in your NI record, you may be able to boost years to get to the full amount.
There's a link in your forecast to do this, or you can use the link in the box above. Once you've checked your NI record, go to step 3.
Important: In most cases, if you're projected to get a full state pension – even if you're currently missing some years – buying extra years won't boost the amount you'll get. That's because you can't get more than the full state pension (and if you do end up missing future years, you can always buy them then).
BUT the forecast will assume that you're going to continue working in the UK until you hit state pension age. If you're not planning to do that – maybe because you want to take an early retirement or live abroad for some years – you'll need to factor that in, even if your forecast says you're on track for the full amount. If this applies to you and you're unsure what it means for your state pension, your best bet is to speak to the the Future Pension Centre.
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Step 3: If you have gaps in your record, see if you can plug 'em for FREE with NI credits
It's not only work that earns you NI years. A range of scenarios see you build up NI entitlement automatically. (There are a few issues currently with adding NI years if you're claiming Universal Credit.) Yet some credits need to be claimed manually to fill gaps – see if any of these scenarios fit:
- Caring for a child in the family: As long as you are/were between 16 and State Pension age. If it is your child, only one parent can claim the credits via Child Benefit, but you can transfer the credit from one parent to the other – see our Child Benefit guide. If the family member is/was under 12 and not your child, see our Grandparents' Childcare Credit guide for more info.
- On Statutory Sick Pay: You are/were on it and not earning enough for a qualifying year.
- Unemployed and actively looking for work: You needn't have been claiming Jobseeker's Allowance, but will need to prove you were looking for employment.
- On Employment and Support Allowance: Eligible for it, but not claiming it.
- Caring for a sick/disabled person: If it is/was for at least 20 hours a week. See our separate Carer's Credit guide on this for more details.
- 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 (kinship carer in Scotland): 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 are 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.
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.
Step 4: Work out if you should pay to boost your State Pension
If a shortfall in State Pension is likely and you've NI gaps in the years 2006 to 2016, you need to decide by the deadline of 5 April 2025 whether to top up. Some help...
- 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 £221.20 a week, and you won't be able to plug gaps by any other means, topping up could be a no-brainer.
- For those older than 40 but still some way off State Pension age it's more of a toss-up, as you may still fill the gaps naturally. The younger you are, the more time you have to earn enough qualifying years before you reach State Pension age.
- For most under the age of 40, it probably won't make sense to pay for full NI years, but it might be worth checking if you can upgrade partial years on the cheap. If you've gaps in your NI record that you're certain you won't make up (for example, if you've moved overseas), or if you're really worried about not being on track and want some extra peace of mind, it might be worth checking if you have any partial years in your record, as these can sometimes be upgraded to full years for as little as £15 – we've more details below.
It worked for Caroline, who emailed:
I am absolutely delighted... I was only one week short of a full year. I've paid a one-off payment of £15.40 [voluntary class 3 National Insurance 2021/22 rate] to get an extra £127.92 per year on my State Pension. So once again a success!
- MoneySaver Caroline
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. So it's doubly important to call the Department for Work and Pensions' helplines in step 6 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.
Step 5: Use our calculator to see what topping up could be worth
Most of the time a full National Insurance (NI) year costs £824, unless:
- You're topping up the 2023/24 tax year, in which case it's £907.40.
- You're topping up either the 2020/21 or 2021/22 tax years, in which case it's about £20 to £30 cheaper, as you pay the original rate for those tax years.
- You're self-employed.
- You're topping up a partial year, in which case it'll cost less to make it 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.
The maths is simple. If a full NI year usually costs you £824 and adds up to £328 each year to your pre-tax State Pension, 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 £221.20 a week, so if you're projected to get £200 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, but it's important to note that the figures it gives you are before tax.
So if your only source of income is likely to be your state pension (and you won't have any other income from private pensions, work or other sources etc), you'll likely be under the taxable threshold (though close to the 20% basic-rate).
The more other income you have, the more likely you are to push up through the tax brackets – and you'll have to factor in any tax you're due to pay into the gains listed in our ready reckoner below.
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...
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 |
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 |
Could this all be a waste of money if the pension system is changed?
It is almost certain that those who have the full number of years on their National Insurance record will get more pension than those who don't, and that is unlikely to change. But when you're considering paying for something now that might not give you a return for many years to come, it can come with known and unknown risks.
Step 6: WARNING – don't pay until you're confident that it's right for you
We've given you a general 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.
The Government has set up a new online service that will show some people how much their State Pension could increase by and the NI years needed to achieve this.
You'll then be able to pay for these missing years securely online without having to speak to anyone. You should only do this if you're happy it's the right course of action though – it is possible to pay to plug a gap and see no gain. If you have questions or don't understand the process, you can still speak to someone – contact details are below.
The new online service isn't available to everyone at the moment. You won't be able to use it if...
- You're already at State Pension age.
- You're within four months and eight days of State Pension age.
- You're filling gaps from when you were self-employed.
- You're filling gaps from when you were working abroad.
- You hold a Married Women's Reduced Rate Election certificate.
- You're eligible for Home Responsibilities Protection.
If any of those apply, you'll need to call up to be able to do this.
Need to speak to someone?
If you're currently unable to use the new online tool or need personalised information, you can still call up to find out more about your NI record and to pay for missing years. The service you use will depend on your age:
- If you're not yet at State Pension age, contact the Future Pension Centre on 0800 731 0175.
- If you're already at State Pension age, contact the Pension Service on 0800 731 0469.
Both the Future Pension Centre and the Pension Service are open between 8am and 6pm, Monday to Friday, and 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.
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Step 7: Not everyone will be better off if they buy more NI years
- If you're likely to have a low income and will only rely on the State Pension, then Pension Credit might 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. So there's a risk you can get the same amount of cash with Pension Credit without paying to top up. Being in receipt of Pension Credit also entitles you to other benefits, such as the Winter Fuel Payment and a free TV licence (if you're over 75).
Though it's worth us saying, there's no guarantee that Pension Credit will still exist, be at the same level or have the same eligibility criteria when you retire. More info in Pension Credit.
- 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 is higher.
This will mean it takes longer for you to breakeven 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.
Martin Lewis: We've covered the known risks, but what about the unknown ones?
"So far in this guide, the team and I have covered all the known pros and cons, so you can evaluate if it's right for you. And for many people, buying extra years will be extremely lucrative.
However, when you’re talking about making a payment now for a return that will take decades to accrue, it’s worth briefly contemplating whether there are other political risks too – and two come to mind.
- More likely: State Pension age changes. It's possible, and maybe even probable, the age at which you're eligible to get the State Pension will be increased again. If so, you'll have fewer years on the State Pension, which could reduce the expected return.
- Less likely: State Pension could be means-tested or even scrapped. With the eyes of someone in 2024 I think this is unlikely, yet who knows where we’ll be in the high tech world of AI, flying skateboards, and talking toasters of 2040.
And of course these are known risks; there are also unknown risks too, as with everything – the ones people haven’t thought of yet.
I don’t write this to put you off. I think if it’s right for you, topping up your State Pension is likely to be hugely lucrative for many. It’s more to make sure you’re aware that even if you do all the checks, go through the bespoke state 1-on-1 advice, there are no perfect checks, everything involves an element of faith.
Certainly the nearer you are to State Pension age the more solid doing this looks. Yet for those in their 40s the structural changes that happen in society over many decades leave a lot of room for uncertainty, so a little more care needs taking before shelling out too much.
Even so as, you need at most only a few years of taking the State Pension to break even, the risks of losing money if you live to a typical age, are pretty slim. And even if the most likely of these risks, that of an increased State Pension age happened, it would only mean what is an extremely lucrative purchase for many right now, drops to being just very lucrative."
Step 8: How to pay voluntary NI contributions
There are two ways to do this, online or on the phone...
Online
If you've spoken to the Future Pension Centre or the Pension Service and want to buy additional NI years online, or are happy to just go via the Govt's online service, here's how to do it:
- Access the service through 'Check your State Pension forecast' page on Gov.uk. It's also available through the HMRC app, which you can download free on the Apple App Store and Google Play Store.
You'll need to log in using your Personal Tax Account login details (this is your 'Government Gateway ID' and password). If you don't already have an online HMRC account or Government Gateway ID, you can register at Gov.uk.
- Decide how many NI years to buy. You'll then be shown your full and partial NI years, and how much your State Pension could increase if you choose to fill the gaps. You'll be able to pay for these missing years securely online, without having to call up separately. You need to pay for these in full via bank transfer or through 'Open Banking' – you can't pay in instalments.
Warning! It is possible to pay to plug a gap and see no gain, so always speak to someone if you're unsure.
On the phone
If you've spoken to the Future Pension Centre or the Pension Service, but can't or don't want to use the online service to top-up, here's how to do it:
- Decide how many NI years to buy. Do note that you don't need to buy all the NI years you want in one go (though you will need to buy any between 2006 and 2017 before 5 April 2025).
- Contact HMRC to get an 18-digit reference number. To find the precise cost of the years you want to buy, and get the reference you need – this is important so they're added to the right NI record and tax years. You'll need to contact HM Revenue & Customs (HMRC). It can give you the number over the phone, or it takes 15 working days by post.
- Send the money to HMRC. Once you have the 18-digit reference number, you can purchase years by through online or app banking or by sending money through your bank or building society account to this HMRC bank account. You can also pay by cheque, though HMRC says this takes longer to process.
- Wait for the extra NI years to be credited to your record. 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.
If you are claiming State Pension, HMRC will prompt the DWP to carry out a 'benefit review', so your payments won't increase straightaway. However, the 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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