When to top up your national insurance to boost your state pension

published 14 July 2019

Should you top up your national insurance to boost your state pension? Reforms to state pensions mean anyone retiring after 5 April 2016 must have at least ten years' national insurance contributions to claim one, while you need 35 years to get the full amount of £8,767 a year.

However, if your national insurance record falls short, you can make voluntary top-up contributions, typically for up to six years after periods in which you didn't pay in full.

In principle, topping up national insurance is a good deal. It will cost you roughly £750 to buy each extra year. In return, each year after the minimum ten years you buy will generate roughly £250 of extra pension every year for the rest of your life.

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The return is even higher if the top up takes you up to the minimum ten-year record, below which you're not entitled to any state pension.

Nevertheless, it's important to check your entitlement to means-tested benefits. If you expect to retire on a low income, with little or no private pension or savings and investments, there's a good chance you'll qualify for means-tested payments such as pension credit.

Extra state-pension entitlement will reduce your eligibility for these benefits, in which case there's no point in paying voluntary national insurance.

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.