Act now to Maximise your UK State Pension

AAM "Act now to Maximise your UK State Pension

If you have gaps in your national insurance contributions, you can pay voluntary contributions to maximise your State Pension entitlement.

You may be able to pay Class 2 contributions which are around 80% less expensive than Class 3 contributions, if you meet the following requirements:

  • You have at least 3 years of National Insurance Contributions
  • You have lived in the UK for 3 years in a row
  • You were working full time overseas in the tax year for which you wish to pay the voluntary contributions

If you don’t qualify to pay the cheaper Class 2 contributions, you should act quickly to fill the gaps in your National Insurance record for the tax years between 2006 and 2016, as there are changes coming in April that will make the top up hundreds of pounds more expensive.

Under current rules, if you reach your retirement age after 5 April 2016 you can fill gaps in your national insurance (NI) record to qualify for the full “new” state pension amount at discounted rates.

These discounted rates end on 5 April 2019, with the cost rising by up to £153.40 per year.

Topping up your state pension through paying voluntary NI contributions can produce a good rate of return, because the cost of doing so is subsidised by the government.

The full new state pension is £164.35 per week, and requires at least 10 qualifying years paying NI contributions, though they do not have to be consecutive years. This means 10 years in work paying national insurance, getting NI credits if unemployed, ill or a parent or carer, or paying voluntary NI contributions

Anyone with a gap in their national insurance record for any year from 2006/07 to 2015/16 under the new state pension system has until 5 April 2023 to fill those gaps.

However, under a special concession, those who pay voluntary contributions by 5 April 2019 qualify for special rates, before the normal rate for buying back one week of NI contributions becomes set at £15 each.

UK Voluntary Contributions 2019


When you shouldn’t top up

Those with more than 10 years of contributions should first check whether doing so will boost their state pension.

This is because not everyone will benefit, as when HMRC works out your new state pension it uses two calculations – what you would have got under the “old rules” as at April 2016, and what you would get under the new rules from April 2016. Your state pension as at April 2016 is based on the higher of these two numbers.

Many people will retire with a pension largely based on the old rules, especially those who “contracted out” of the state earnings-related pension scheme (SERPS), and so paid less national insurance.

Paying voluntary national insurance contributions now, for years before April 2016, might not boost your basic pension because you may already have the 30 years needed under the old rules and adding more won’t count towards SERPS.

For example, someone who already had a 32-year NI record may find no point buying a missing year such as 2010/11 because they would still only get an old-style full basic pension plus SERPS.

Those who are already set to get more than the full flat rate amount, perhaps because they have a lot of SERPS entitlement, also needn’t bother topping up.

The first step is to check your national insurance record and get a State Pension forecast. You can do this online at

Once you have your forecast, to check if buying back an extra year will boost your pension, contact the DWP Future Pension Centre on +44 191 218 3600. They are open from Monday to Friday, 8am to 6pm UK time.

To find out more on maximising your UK State Pension, talk to your AAM Financial Planner or email


Ian Black

Head of Financial Planning & Wealth Solutions

AAM Advisory




This article is an op-ed piece by Ian Black. The views expressed in this article are those of the author and do not necessarily reflect the views of AAM Advisory Pte Ltd. This document/article should not be construed as an offer, solicitation of an offer, or a recommendation to transact in any securities/products mentioned herein. The information does not take into account the specific investment objectives, financial situation or particular needs of any person. Advice should be sought from a licensed financial adviser regarding the suitability of the investment product before making a commitment to purchase the investment product. Past performance is not necessarily indicative of future performance. Any prediction, projection, or forecast on the economy, securities markets or the economic trends of the markets is not necessarily indicative of future performance. Whilst we have taken all reasonable care to ensure that the information contained in this document is not untrue or misleading at the time of publication, we cannot guarantee its accuracy or completeness. Any opinion or estimate contained in this document is subject to change without notice. The above report may contain data obtained from third parties and as such we cannot guarantee the accuracy of this data.