Pensions might not be the most exciting topic, but if you’ve ever been self-employed, taken a career break, or spent time working abroad, now is a very good time to check in. That’s because from April 2026, the rules around plugging gaps in your National Insurance record are changing, and if you want to maximise your state pension, the clock is ticking.
What is the full state pension?
The UK state pension is a marvellous thing. It isn’t a huge amount of money, but it ensures that those who have paid into it receive a baseline of retirement income. Because it is only a baseline, you should also do other things to save for your retirement (but that’s for another article).
For 2026/27, the full state pension is £241.30 a week, amounting to over £12,547.60 a year. But you only get that full amount if you’ve racked up 35 years of qualifying National Insurance (NI) contributions.
If you’ve got fewer than 35 years, you’ll get a reduced amount. And fewer than 10 years? That’s a zero from the government.
Ways to maximise your state pension
As accountants, we get a lot of questions about pensions, and we love bearing good news. There are things you can do that will help you get the maximum state pension! Here are a few of the main ones.
- Check your National Insurance record for any gaps
If you want to maximise your state pension, your first step is to check for any gaps in your NI record. Here are the four ways to do that:
- Check online: Log into your Personal Tax Account at gov.uk to see your contribution history and state pension forecast.
- Ask HMRC: If something doesn’t look right, you can contact HMRC to ask why a year isn’t counting.
- Call the Future Pension Centre: This government service can help you understand your entitlement and what you can do to increase it.
- By post: Although HMRC makes it hard to get to this form! Request your NI contribution statement by post.
If you do have gaps, it’s important to check them out first. Is this an error that needs to be corrected? Or is the gap a valid one?
Here are some valid gaps:
- Maternity and parental responsibility gaps: Since 1978, you should not have an NI contribution gap due to maternity or parental responsibilities for a child aged under 12. If you do, then get in touch with the HMRC National Insurance helpline to ensure you are on track for your maximum state pension.
- Low earnings or non-payment gaps: If you have a gap in your record because you simply didn’t earn enough (or at all) to pay NI contributions, then you should qualify to pay voluntary contributions or to buy additional years’ credits. If you ask HMRC, they will tell you how many years’ voluntary contributions you need to pay to fill the gaps in your contributions record. Generally, they will ask you to pay the Class 3 voluntary contribution to work towards your maximum state pension.
2. Pay voluntary NI contributions to plug these gaps
If you’re missing years and want to maximise your state pension, now’s the time to take action. HMRC gives 4 causes of gaps and which type of voluntary contribution you can make to deal with this.
- Employed but had low earnings: Class 3 NIC
- Unemployed but didn’t claim benefits: Class 3
- Self-employed but had low earnings: Class 2
- Living or working outside the UK: Could be Class 2 or Class 3, depending on your circumstances.
If you are living abroad or you don’t earn enough to pay NI contributions, then you might be able to pay NI contributions to sort out your entitlement to the state pension. You can do this by paying class 2 or class 3 NI contributions. However, it is important to check you are eligible to do this, which means contacting HMRC’s National Insurance helpline.
| Essential information for those who’ve lived or worked abroad…From April 2026, you’ll no longer be able to pay the cheaper Class 2 voluntary contributions for periods spent living outside the UK. You’ll have to pay the more expensive Class 3 instead.That means if you’ve spent time abroad, it’s definitely worth looking into whether you can still pay Class 2 for any of those years, because that can save you a lot of money while still helping to maximise your state pension. |
Choosing between Class 2 and Class 3 voluntary NI contributions
Firstly, there is a matter of cost. Class 2 is much lower than Class 3 NIC. However, you also need to work out which one you are eligible to pay for. There is no point in paying for it only to find out it doesn’t work!
Importantly, whilst both Class 2 and Class 3 count towards your state pension, they qualify you for different state benefits. Qualifying for state benefits as well as the state pension is a reason why you might want to pay these voluntary contributions.
Do you need to pay voluntary contributions?
Have you got enough working years left in your career so that you will get to the maximum number of contribution years by the time you reach state retirement age, or do you need to pay voluntary contributions?
Is it worth paying for extra years of state pension?
The short answer is yes! The more complicated answer is it depends. Each year that you pay is worth £342.00 per annum (2026 rates) in additional state pension. This means you get your money back after about 3 years of receiving pensions.
How long you live for then becomes important. Live for 10 years after taking your pension and each additional year you have purchased gives you a profit of around 2.3x what it costs you. Obviously, the longer you live, the bigger your benefit.
3. Defer your state pension
You can agree with the DWP to defer taking your state pension and claim it at a future date. What this means is that you defer taking money, but when you do start taking it, you get extra money with each pension payment. Your pension increases by 1% for every 9 weeks you defer. Defer by a year and get nearly 5.8% extra!
4. Backdate your state pension
This is different to deferring it. If you are eligible but don’t claim it and instead claim your state pension at a later point, you are backdating your pension. This is paid out to you at the time you make your claim, but is taxed based on when it was due to be paid! This is paid out as a lump sum.
Why this is worth doing
The state pension is guaranteed income, indexed to inflation, and paid for life, which makes it one of the best-value financial returns you can get from a voluntary top-up.
If you’ve got a few gaps in your record, filling them in could cost a few hundred pounds but increase your pension by thousands over the course of your retirement! For many people, especially those who are self-employed or have taken career breaks, this is a golden opportunity to maximise your state pension at a bargain price.
| Struggling to understand National Insurance Contributions? Want to secure your maximum state pension? We help clients understand whether it’s worth paying to fill in missing years and how to go about doing it.If you’d like a hand checking your record, calculating what’s worth topping up, or just making sense of it all, drop us a line at [email protected] and we’ll get you sorted. |
