Mind the gap: why filling the holes in your NI record can pay dividends

Paying 800 to 900 to plug a missing year could boost a state pension by thousands

- Shane Hickey

There has been a surge in the number of people who have boosted their state pension pots, potentially netting them thousands of pounds more for their retirement.

Figures from HM Revenue & Customs showed about 23,000 people handed over a total of £27m in the space of about 10 days this month. They were paying to fill gaps in their national insurance (NI) records to improve their eventual state pension.

Under the new state pension system, if your NI record started before April 2016, you will need at least 35 years of NI contributions or credits to qualify for the full payment of £221.20 a week. But if there are gaps, perhaps from unemployment or time spent raising a family, you may not get the full amount.

Typically, you can only pay voluntary contributions going back six tax years. But until 5 April 2025, the opportunity has been extended back to 2006-7, and this may particularly appeal to some in their 40s, 50s and 60s who have the cash.

HMRC has reported a spike in the number of people filling the NI gaps as the deadline nears. It has acknowledged this strong demand means its response times are slower, and it has apologised for any anxiety this may cause customers.

Between April and the beginning of this month, about 37,000 people added a total of £35m in top-ups to their pots online, but by 13 February the number had risen to 60,000, who had put in £62m. A spokesperson for HMRC says people have recognised the deadline is looming after publicity highlighting it.

But it is vital to be aware that the younger someone is, the more likely it is that they will over time build up their NI contribution record in the normal way - which means that, for some, buying extra years now would be a waste of money.

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