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Pension top up options

pensions & retirement

Pension top up options

Find out how to top up your pension and maximise your retirement income. 

You can boost your retirement income by topping up your pension. There are various options available depending on the type of pensions you hold. 

How to top up workplace and personal pensions 

You can boost your workplace or personal pension by increasing your contributions. This could be in the form of a lump sum or by increasing your regular contributions. 

Any contributions you make receive a substantial boost from tax relief. Tax relief adds 20% to your contribution. Higher-rate taxpayers can claim back additional tax on their self-assessment tax return.

Should I top up my workplace pension or my personal pension?

Workplace pensions enable you to benefit from both personal and employer contributions. 

Alternatively, you could choose to contribute to a personal pension, such as a SIPP, to boost your retirement income. SIPPs allow you to manage your own investments and pension pot. They also tend to offer a far wider range of investment options. 

However, you should only choose to open a SIPP if you are comfortable managing your own investments. It is also comes with risk as your investments could go down as well as up. 

Be aware of savings limits

Each year you can contribute 100% of your salary, up to a maximum of £40,000 gross, to your pensions. If you exceed your annual allowance, you may face additional charges. 

Final salary pensions top up

You cannot increase your contributions to top up a salary-based defined benefit pension. Instead, extra savings need to be made into an additional voluntary contribution ( AVC) plan. 

Contributing to an AVC plan could enable you to bring forward your retirement, but that is likely to be very expensive. Alternatively, your AVC plan could be used for saving towards an additional source of retirement income. 

State pension top up options

A full state pension is currently £175.20 a week (£9,110.40 a year). To qualify for the full state pension, you must have made 35 years’ worth of national insurance (NI) contributions. 

If you have made fewer than 35 years’ worth of NI contributions, your weekly state pension is calculated proportionally. Each year you have made NI contributions adds roughly £5 to your weekly pension. 

There are two ways you can potentially increase your state pension. 

Voluntary national insurance contributions

You can make voluntary national insurance contributions to fill in some of the gaps if you have made fewer than 35 years of NI contributions. This costs about £15 a week or just under £800 if you pay as lump sum.

Each year you pay for adds roughly £5 to your weekly pension (over £250 a year). Most people can pay for up to six years of additional NI contributions. 
You cannot top up your state pension if you are already due to receive the full £175.20 a week.

Delaying your state pension

You can boost the amount of state pension you eventually receive if you delay taking it. 

Every 9 weeks you delay taking your state pension adds 1% to the amount you eventually receive. If you delay for a year, it adds 5.8% - taking your weekly pension up to just over £185 a week. 

Pension top up FAQs

You can top up your state pension with a lump sum if you have made fewer than 35 years’ worth of national insurance contributions. 

By paying a lump sum of just under £800, you can add a year of voluntary national contributions. This adds roughly £5 a week to your state pension. 

You can only put more than £40,000 into your pension if you qualify for carry forward. This allows you to use unused annual allowance from the previous three years.

In order to qualify for carry-forward, you must have:

  • Used your full allowance in the current tax year.
  • Contributed less than £40,000 in at least one of the previous three tax years. 
  • Been a member of a pension scheme in each year you are carrying forward from. 
  • Earned at least the amount you are contributing in the current tax year. 

Get more from an ii SIPP

We don’t believe in charging a percentage fee that goes up as your investments grow.

Our award winning SIPP gives you fixed, transparent pricing, with no percentage-based fees. So you can watch your portfolio grow while your costs stay the same.

Open a SIPP and pay no SIPP fee for six months. Following the offer period, the ii SIPP fee is only £10 a month. Terms apply

The ii SIPP is aimed at clients who have sufficient knowledge and experience of investing to make their own investment decisions and want to actively manage their investments. A SIPP is not suitable for every investor. Other types of pensions may be more appropriate. The value of investments made within a SIPP can fall as well as rise and you may end up with a fund at retirement that’s worth less than you invested. You can normally only access the money from age 55 (age 57 from 2028). Prior to making any decision about the suitability of a SIPP, or transferring any existing pension plan(s) into a SIPP we recommend that you seek the advice of a suitably qualified financial adviser. Please note the tax treatment of these products depends on the individual circumstances of each customer and may be subject to change in future.