Interactive Investor

Deadline to fill UK state pension gap extended

13th June 2023 16:05

by Alice Guy from interactive investor

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State pension triple lock makes National Insurance extended deal worth £77,000, plus added boost for self-employed low earners.

deadline extended 600
  • Triple lock and inflation make National Insurance deal potentially worth £77,400
  • Low-earning self-employed workers may be eligible to pay a lower rate of voluntary National Insurance contributions, paying £179 for an extra year of state pension, rather than £907 for employees

Thousands of older people will now get the chance to boost their state pension by £77,400 over 20 years as the deadline to plug National Insurance gaps is extended to April 2025, according to calculations by interactive investor.

Buying an extra 10 years of National Insurance (NI) contributions costs £9,070 for employees and those paying class 3 contributions, and £1,794 for those eligible to pay class 2 contributions, and they now have until April 2025 to act. The deal previously expired in July 2023 but was extended on 12 June 2023.

Under normal rules, it is possible to fill gaps in a NI record up to six years, meaning savers can plug gaps going back to 2017-18 at present. However, there are currently special rules allowing eligible candidates the opportunity to go back a further 10 years (to 2007-08), as long as they do so before April 2025.

This arrangement is only available for people who will claim the new state pension and reach state pension age on or after 6 April 2016.

How does it work?

Buying extra years involves paying what are known as ‘voluntary class 3 NI contributions’. At present, voluntary class 3 NI contributions cost £17.45 a week or £907 for the year.

With each lump sum adding up to 1/35 of the full state pension, one year’s worth of voluntary NI contributions boosts your state pension income by approximately £303 over the year. But this extra £303 will gradually increase in line with the triple lock and be worth £484 in 20 years, assuming the state pension increases by at least 2.5% each year – the actual increases will be the highest of inflation, average wages and 2.5%.

Self-employed low earners

Low-earning self-employed people earning under the small profits threshold of £6,725 in 2022-23 and 2023-24 may be eligible to pay class 2 voluntary contributions, which are cheaper than class 3 contributions. Someone paying class 2 contributions would only need to pay £3.45 per week or £179 per year to buy an extra year of state pension compared to £17.45 per week or £907 per year for employees.

This means that self-employed people with low earnings might be able to buy extra state pension potentially worth £77,400 over 20 years for only £1,794.

interactive investor calculates that somebody purchasing 10 years of NI contributions at the cost of £9,070 (10 x £907) could boost their state pension by £77,400 over a 20-year retirement, £33,946 over 10 years and £15,927 over five years.

This is based on the new full state pension payment of £10,600 for the 2023/24 tax year.

Purchasing six years of NI contributions at a cost of £5,442 could translate to additional state pension of £46,440 over 20 years, £20,368 over 10 years, and £9,556 over five years.

Even purchasing one additional year of NI contributions at the cost of £907 could result in a significant uplift in state pension – £7,740 over 20 years, £3,395 over 10 years and £1,515 over five years.

Impact of voluntary NI contributions on state pension payments over different time periods at retirement

Additional NI contributions

Additional NI cost class 3 (employed and some self employed)

Additional NI cost class 2 (low earning self employed may be eligible)

Additional state pension per year

Additional state pension over 5 years

Additional state pension over 10 years

Additional state pension over 20 years

Purchase 1 additional year







Purchase 5 additional years







Purchase 10 additional years







Purchase 16 additional years







Assumptions: state pension increases 2.5% per year. Source: interactive investor

Alice Guy, Head of Pensions & Savings, interactive investor, says: “The extension of the National Insurance deadline is amazing news for anyone with gaps in their National Insurance record and that often includes self-employed people, and anyone who’s taken time out to care for loved ones.

“The good news is that it may be cheaper for some lower paid self-employed people to pay voluntary National Insurance contributions and boost their state pension and it only costs £179 for someone paying class 2 contributions to buy an extra year of state pension. You might be entitled to pay voluntary class 2 contributions if you’ve been self-employed but earning below the small profits threshold, currently £6,725. You can phone the DWP helpline to find out how much it would cost to make voluntary contributions.

“Self-employed people often struggle to save enough for retirement as they don’t have access to a workplace pension and can face periods with a lower income when they can’t afford to pay into a pension. So, it’s vital they keep an eye on their state pension and make sure they receive the maximum possible.

“Paying extra voluntary National Insurance contributions can be amazing value if you’ve got gaps in your record. You’ll only need to live for four years to claw back the extra contribution and you’ll be seriously in the money if you survive for another 10 or 20 years. However, there are a few things to watch out for and paying voluntary National Insurance contribution isn’t suitable for everyone. It’s important to check the government website to see if you have gaps in your National Insurance record before you make additional contributions.

“There’s no point buying additional contributions if you already have or are likely to have 35 years of National Insurance contributions as you’ll already be entitled to a full state pension. You may have built up more years than you think as you can get National Insurance credits for some years you haven’t worked, like caring for children under 12 years old or caring for a relative if you receive carers allowance.

“There are some circumstances where you may not be able to plug the gap for missing contributions, for example if you were contracted out during those years, which was the case for some older workers with certain pension schemes. It might be worth ringing the DWP helpline to check.

“In extreme cases, if you survive 20 years, you may be able to boost your state pension by £117,794 for an original extra National Insurance contribution of only £14,512.

“You’ll also have to pay income tax on your pension income, depending on your other income so you could receive slightly less in your pocket.”

Note: to qualify for the full new state pension, men and women each need 35 years’ of National Insurance contributions, or NICs.

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