Money Wellness
Illustrated image of several pensioners from different ethnic backgrounds. State pension top ups. National Insurance contributions gaps. How to top up your state pension
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calendar icon30 Apr 2024

HMRC launches new online tool to help millions boost their state pension

The Check Your State Pension online tool shows Brits how much their state pensions could increase if they topped up their pension pot. It also details how much voluntary contributions would be needed to grow their pension payments.

Launched in conjunction between HMRC and the DWP, the online tool is aimed at anyone who has gaps in certain tax years.

Gaps can occur in your record if you do not pay NI or do not get National Insurance credits. This could be because you were unemployed, employed but had low pay, or took time out of work to bring up children.

Using the tool, people can fill in any missing years to ensure they receive the maximum state pension payouts when they come to retire.

Payment for missing periods can be made securely through the service. Those who choose to top-up this way will receive confirmation that their payments have been successful, with their NI records updated automatically.

What’s the state pension?

The state pension is a regular payment from the government that most people claim in later life. Men and women are currently entitled to the state pension at the age of 66, but this is scheduled to rise.

State pension comes in two tiers – the basic state pension and new state pension.  

Anyone who turned 66 on or after 6 April will receive the new state pension. Anyone born before this time will be on the basic pension.

In the current financial year (2024/25) pension payments are paid at:

  • £169.50 a week for the basic pension or £8,814 per year
  • £221.20 per week for the new state pension or £11,502 per year

What is National Insurance? 

When you’re employed you pay National Insurance at an amount based on your earnings. You don’t need to do anything to make these payments, they are automatically deducted from your salary by your employer.

If you earn below £6,725 you pay no NI, but can voluntarily make payments. If you earn more than £12,570 a year, you will pay class 4 contributions.

Your NI payments go towards your state pension payments.

If you’re not able to pay NI because – for example - you’re ill or caring for someone, you may be able to get credits. Claiming credits will mean that you can continue building up your state pension entitlement.

How do gaps in your National Insurance record affect you?

If you stop paying NI, you will have gaps in your record. There are lots of reasons why you might stop paying, e.g.,

  • You were employed but on a low salary
  • You were unemployed and not claiming benefits
  • You were self-employed but did not pay contributions because you weren’t making enough profit
  • You lived or worked outside the UK
  • You took time off to raise a family but didn’t claim credits
  • You were a carer and didn’t claim credits
  • You were ill but did not claim any benefits

Gaps in your NI record could result in you not having enough contributions to be able to receive the full state pension or qualify for additional benefits. This could greatly affect the quality of your life when you come to retire. And could mean that you have to work for longer because you can’t afford to retire.

Avatar of Caroline Chell

Caroline Chell

Caroline has worked in financial communications for more than 10 years, writing content on subjects such as pensions, mortgages, loans and credit cards, as well as stockbroking and investment advice.

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