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There are only a few months left to boost your State Pension eligibility. Here’s how
18th December 2024


As you’re managing the complexities of planning for retirement and are assessing your sources of pension wealth, one area that’s easy to overlook is your State Pension.
Whilst private pension savings and other investments could form the bulk of your retirement income, the State Pension could still act as the bedrock, covering essential costs and providing stability.
Indeed, a recent report from Scottish Widows revealed that 75% of recipients say the State Pension helps them pay for essentials.
Despite its importance, you aren’t automatically entitled to the full new State Pension, and securing the full amount often requires proactive steps.
With a key deadline approaching, continue reading to discover some ways to boost your State Pension eligibility.
You must have a certain number of “qualifying years” to be entitled to the full new State Pension
Once you reach the State Pension Age – currently 66 as of 2024/25, rising to 67 from 6th April 2028 – you can begin receiving payments.
You’ll need to claim your State Pension payments, these aren’t offered automatically. You can also defer your State Pension and increase future payments if you don’t need the funds at that time.
As of 2024/25, the new full State Pension is worth £221.20 a week. Though, the triple lock ensures the value of the State Pension rises each year according to the highest of:
- Inflation (as measured by the Consumer Prices Index)
- Average earnings growth
- 5%.
As such, the new full State Pension will rise by 4.1% to £230.25 from 6th April 2025.
However, to receive the full State Pension, you must typically have at least 35 qualifying years on your National Insurance (NI) record before retirement. You can accumulate these “qualifying years” in several ways, such as:
- Working and paying NI contributions (NICs)
- Receiving NI credits for periods of unemployment, illness, or care
- Making voluntary NICs.
If you have gaps in your record – perhaps due to spending time working abroad or taking a career break in the past – you may not be entitled to the full, new State Pension.
To understand your current position, it’s worth obtaining a State Pension forecast from the Government website. This provides you with a detailed breakdown of how much you can expect to receive in State Pension payments and highlights any missed qualifying years.
You could plug gaps in your National Insurance record as far back as 2006, as long as you meet the April 2025 deadline
If you discover gaps in your record after obtaining a State Pension forecast, you can typically fill them by purchasing additional credits.
Under normal circumstances, you can only buy voluntary NICs for the past six years. Though, until the 5th of April 2025, you have the opportunity to back-pay NICs as far back as April 2006, provided you reached or will reach State Pension Age after April 2016.
Standard Life reveals that it currently costs £824.20 to purchase a full year’s Class 3 voluntary NICs, and slightly more if you’re buying NICs from April 2023 onwards.
Interestingly, the same source states that purchasing one additional qualifying year could increase your annual State Pension entitlement by £275.08.
So, if you start receiving the State Pension at the age of 66 and then live for another 20 years, this single investment of £824.20 could boost your total retirement income by around £5,500.
While this might sound attractive, it’s essential to weigh the potential tax implications, as an increased State Pension could push more of your retirement income above the annual Personal Allowance, which stands at £12,570 as of 2024/25.
If this happens, you could face an unexpected Income Tax charge, particularly if the extra State Pension income moves you into a higher tax bracket.
So, before you buy voluntary NICs to boost your State Pension entitlement, it may be worth speaking to a Financial Planner first.
You could claim credits from other sources, rather than paying to boost your State Pension
Before you commit to purchasing some additional qualifying years, it’s first worth exploring whether you’re eligible for any free credits to fill gaps in your record.
For instance, you could claim NI credits for years in which you were:
- On maternity leave
- Caring for an elderly or ill relative
- Unable to work due to an accident or illness
- Providing childcare for grandchildren under the age of 12.
These credits are usually available without cost, so it’s worth checking whether they apply to your circumstances before you make any financial commitments to increasing your State Pension.
A Financial Planner could help you make an informed decision
While the opportunity to back-pay NICs does offer a valuable method to boost your State Pension entitlement, it isn’t the right choice for everyone.
The decision depends on factors such as your health, expected lifespan, and overall retirement income.
Indeed, if you anticipate living a shorter life, the financial return on additional contributions might not justify the cost.
Conversely, if you expect to live well into your 90s, the investment could provide considerable long-term benefits. It’s also important to consider how paying voluntary NICs fits in with your broader financial plan.
Since a Financial Planner will understand your unique circumstances, they could help you decide whether plugging gaps in your record is worth it.
They can do so by evaluating your options and ensuring that your approach aligns with your overarching retirement goals.
Get in touch
We could ensure that you’ll receive your full State Pension entitlement when you reach State Pension Age, and whether making voluntary contributions is worth it.
Email us at enquiries@pen-life.co.uk, or call 01904 661140 to find out more.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.
Category: Pensions