10 minute read
The short answer for most people is yes, you should buy enough years to end up with a full State Pension and the key reasons are:
The low level of risk as any income is backed by and guaranteed by the UK government
The cost of increasing your State Pension income takes about four years to recover
The potential for future increases such as the over 10% increase just applied
There’s a looming deadline to buy some of the prior years
BACKGROUND
If you’re a man born after 5 April 1951 or a woman born after 5 April 1953, you have until the 31st of July 2023 to pay voluntary contributions to make up for gaps in your NI record between 2006 and 2016. After this date, the number of years you can buy falls to the last six years, so if you have missing years from decades ago you won’t be able to make these up.
The deadline was previously set for the end of the tax year on April 5th, but this was extended to give people more time – they have been so busy dealing with enquiries it has been almost impossible to get through on the phone.
THE COSTS & THE FINANCIAL BENEFIT
Buying extra years involves paying what are known as ‘voluntary class 3 NI contributions’, and the rate is currently £824.20 for a full year (£15.85 per week), which will boost your State Pension by around £275 a year (£5.29 a week).
Sir Steve Webb, a former pensions minister and partner at Lane Clark & Peacock, said: “You’ll get your money back from a year’s worth of voluntary contributions within about four years of drawing your State Pension, and everything after that is a profit.”
However, while buying extra years to plug any gaps in your NI record can be good value for money and potentially increase your State Pension by thousands of pounds over your lifetime, it’s not always the right thing to do. Whether it’s worthwhile will also depend on factors out of your control such as how long you live beyond State Pension age.

A WARNING
Please also note that some years that you can make up will not increase your pension income so always check with the The Pension Service to make 100% sure that you are getting what you are paying for.

HOW MANY YEARS DO I NEED?
You’ll usually only be eligible for the maximum new State Pension if you’ve made 35 ‘qualifying years’ of NICs, and you must have at least 10 years’ to receive any State Pension at all. You’ll get qualifying years for every year you’re in work, and earning above a minimum amount (£190 a week in the 2022/23 tax year) or if you’re paying voluntary contributions. You can also get National Insurance credits if you’ve taken time out of your career to bring up children or look after someone who’s ill or disabled.
However, the rules aren’t necessarily clear cut for anyone who started building up their NI record before 2016, when the new State Pension was introduced. The number of qualifying years needed for a full State Pension is based on your age and NI record to date, but this can be impacted by whether or not you contracted out of the Additional State Pension. The best thing to do to find out where you stand is check your record, and you can find out how to do this by following this link:
Bear in mind that if you’re a man born between 6 April 1945 and 5 April 1950 or a woman born between 6 April 1950 and 5 October 1952, you fall under the old basic State Pension system, and you must make any top up payment within six years of any gap in your NI record.
The first thing you need to do is work out where you currently stand and if you have any missing years in your National Insurance record.
Bear in mind that the State Pension age is under review and is gradually being pushed back in line with rising life expectancy. At present, it’s set to increase to 67 by 2029 and again to 68 between 2037 and 2039.
FUTURE INCREASES
Bear in mind that the State Pension usually rises to ensure it won’t lose value in real terms. It’s usually guaranteed to rise by the highest of September’s inflation figure, earnings growth, or 2.5%.
However, retirees received a 3.1% uplift in April 2022 after the ‘triple lock’ was suspended for a year. The government has promised to reinstate the triple lock in 2023 and have just increased pensions by over 10%.