State Pension Top – Don’t miss out

Have you maximised your full state pension allowance?

The ability to increase your state pension going back as far as 2006 has been extended, under normal circumstances you’d be able to go as far back as six years.

The extension has been moved onto 5th April 2025.  This is in part due to the large volumes of calls the revenue were receiving as they did not have enough resources to help everyone who called.

Now the question why would you want to top up your state pension. 

In order to maximise the full state pension and receive £203.85 per week (£10,600.20 per year) you need to have completed 35 years national insurance (NI) contributions.  For each year of NI missed payments is a factor of 35 e.g £203.85 / 35 years = £3.92 per year.  If you are missing 15 years you’ll be £58.80 per week less off (£3057.60 per year).

Now is it worth topping up the state pension or not?

The cost to replace a missing NI year is £824.20 for each year.  In the example above this would cost £12,363 to replace the full 15 years of state pension.  Yes, it is a lot.  However after four years (plus inflationary increases) you will be financially better off.

The average life expectancy of a 60 year old male is 84 and 87 for a female. Therefore ignoring any inflationary increases to the state pension, over a potential 16 years for a male is £48,921.60 more and £58,094.40 more for a female.

Now remember this date has been moved to 5th April 2025 once this date has passed we will be back to only being able to use the previous 6 years.

What if you miss the date and only use the previous 6 years? 

To start with you wont receive the full state pension.

Using the same figure as above, £824.20 each year to top up a NI year will cost £4945.20 for the 6 years.

Rather than receiving a £79 per week (£4108 per annum) you could get £113.68 (£5911.36) an extra £1803.36 per year

If you want to check on your own state pension forecast to make sure you have made enough NI contributions you can check here https://www.gov.uk/check-state-pension, or if you want to discuss this with an independent financial adviser call us on 01483 654135 or email me direct on leon.alden@2plan.com.