30 Apr 2024

New state pension top-up tool launched – should you use it?

You can now buy voluntary contributions online without calling up

Topping up your state pension by buying National Insurance Contributions has just become easier, after a long-awaited online tool launched this week.

The new service from HMRC and the Department for Work and Pensions (DWP) allows those under state pension age to view gaps in their National Insurance (NI) record and pay for voluntary contributions online – without having to phone up.

Last year, the government was forced to extend the deadline for those wishing to top up historic gaps in their NI record, after a surge in demand resulted in long call waiting times to HMRC.

Here, Which? explains how to use the new online top-up service and whetherplugging gaps in your NI record is worth doing to boost your state pension.

How to use the new online service

The government has enhanced its existing ‘check your state pension forecast’ tool, which you can access via gov.uk or the HMRC app.

If you have a personal tax account, you need to log in using your existing Government Gateway details; alternatively, you will be able to register to set up an account.

The government is reminding users to never share their login details with anyone, including a tax agent if they have one, to avoid the risk of falling victim to a scam.

Once logged in, you'll be able to see which years have NI contribution gaps, the cost of filling the gaps with voluntary payments and by how much it would boost your state pension.

Example of NI record with contribution gaps

You can choose which years you would like to fill and pay securely for the top-up via bank transfer or open banking – previously this had to be done on the phone.

You can't currently pay by card for your NICs, but HMRC told Which? it's looking at ways it can expand the service to accept other payment methods in future.

Once you’ve made the payment, you’ll receive confirmation and your NI record will be updated.

Find out more: how much state pension will I get?

Who can use the service?

The government says the majority of customers will be able to use the online top-up service without needing to phone HMRC or the DWP, including those living abroad who want to pay NICs for years when they were a resident in the UK.

However, it's not currently available to those who are already receiving their state pension, self-employed workers, or those currently living outside the UK with gaps incurred while working abroad.

If you're unable to use the service, or if you’d prefer to speak to someone on the phone, you can call up to check your NI record and to pay for missing years on 0800 731 0175.

Find out more: how much do you need to retire?

How many NI years can you buy?

Under normal rules, it’s only possible to fill gaps in your NI record by buying voluntary Class 3 National Insurance Contributions (NICs) for the past six years, with each year's deadline being on 5 April.

After the deadline, the gap becomes permanent and could affect how much state pension you're entitled to.

However, the DWP temporarily relaxed this rule back in 2014, allowing some people to fill gaps for any year from 2006-07 onwards.

This was so those reaching state pension age in the early years of the new state pension, which came into force in April 2016, had an extended opportunity to assess whether they would be able to improve how much they got under the new system.

The relaxed rules were due to end in April last year, but HMRC extended the deadline – first until the end of July last year and then again until April 2025 – after a surge in calls.

So if you're a man born after 5 April 1951 or a woman born after 5 April 1953, you have until 5 April 2025 to pay voluntary contributions to make up for gaps between April 2006 and April 2018.

HMRC said tens of thousands of people have taken advantage of the scheme, and the extension means there is no 'immediate rush' for people to complete gaps, and they'll have longer to spread the cost.

Find out more: National Insurance, benefits and state pension

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What's the cost of topping up?

If you’re a man born on or after 6 April 1951, or a woman born on or after 6 April 1953, you’ll get the new state pension (worth £221.20 a week or £11,502.40 a year in 2024-25).

You need at least 10 qualifying years of contributions (NICs) in your National Insurance record to receive any state pension, and 35 years to get the full amount.

The standard cost of buying 'Class 3' National Insurance contributions is £17.45 for a week for missing contributions in the 2024-25 tax year. So that would cost you £907.40 for an entire year.

However, if you're looking to fill gaps that occurred in the past two tax years, you would pay the rate from those years. The rate for 2023-24 was also £17.45 a week and in 2022-23 it cost £15.85 per week.

For those able to fill gaps between 2006 and 2016 (men born after 5 April 1951 and women born after 5 April 1953), the cost for a week is £15.85, regardless of the year.

Topping up an entire year (£824.20 or £907.40) could add an extra £302.86 a year onto your state pension, which means it will pay for itself after between two and a half and three years.

Is topping up worth it?

Paying voluntary contributions won't always increase your state pension.

For example, filling blanks for certain years – particularly those before 2016/17 – can sometimes have no impact on your state pension, particularly if you were contracted out of the additional state pension.

But the new service will allow you to check whether you would be better off in retirement before making the payment.

Plugging gaps may generally be a good idea if:

you're close to state pension age and don't have enough qualifying years to get the full state pension.
you know you won't be able to get the qualifying years you need to get the full state pension during your working life.

It's worth remembering that the younger you are, the more time you'll have to naturally plug any gaps in your record while you're still working.

Remember, you may be able to top up missing years for free with National Insurance credits – especially if the gaps in your NI record were due to illness, looking after children or being unemployed.