Britons urged to make key state pension check as ‘ticking £6,000 time bomb’ looms
Women's state pensions may be impacted the most, according to research.
Britons are being urged to check their National Insurance record to ensure they have enough contributions for a full state pension.
The check is becoming more urgent, as people only have around one year left to plug gaps dating back to 2006.
After April 2025, people will only be able to date back six tax years to make contributions, which can cause them to lose thousands of pounds.
Most people will need around 35 years of contributions to receive the full new state pension, but some may need more, savings expert Kevin Mountford, co-founder of the online savings platform Raisin UK, warned.
Mr Mountford said: “Gaps in your National Insurance record could mean you will not have enough years of contributions to claim full state pension or even qualify for some benefits.”
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According to new Raisin UK data, the contribution gap could impact women the worst.
It’s research found that if a woman has no children, she is more likely to have an extra £11,315 in her pension pot at the end of her career compared to a woman with children, as women lose out on £783 every year after having a child.
Even more worryingly, Raisin UK data estimates that over 43 million women are behind on their National Insurance contributions by around £2,572, potentially adding an extra year to their working lives.
Warning of a “ticking £6,000 timebomb”, Mr Mountford said: “At the moment, you can pay to plug National Insurance gaps dating all the way back to 2006, but from April 2025, you’ll only be able to pay for voluntary contributions for the past six tax years.
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“Whilst boosting your National Insurance contributions doesn’t sound like a particularly exciting thing to do with any leftover money, it could earn you thousands of pounds.
“Putting in a full-year class three contribution at £824 could make you £328 per year towards your pre-tax pension - that could add up to over £6,000 before you retire.”
However, it should be noted that, while purchasing missing National Insurance years to plug gaps may be beneficial for some people, it may not be for others.
People can see if they’d benefit by checking their National Insurance record and state pension forecast on the GOV.UK website.
HM Revenue and Customs (HMRC) and the Department for Work and Pensions (DWP) have also launched a new online state pension forecast service to calculate if they’ll benefit from making voluntary contributions.
Mr Mountford added: “It’s vital you periodically review your National Insurance record going forward for any gaps, helping you secure a better pension when the time arrives.”
