Want to top up your state pension – time is running out!

If you’re a regular reader of this blog, you’ll remember we’ve often covered the topic of topping up your state pension. In brief, you need 35 full years of National Insurance contributions to qualify for the full pension. If you have missed years, you can normally ‘buy’ them back by paying £824. For each extra year you buy back, you top up your state pension by about £275. In other words, if you buy back a year, it pays for itself within three years.

The catch is that, under normal circumstances, you can only buy back ‘missing’ years over the previous six financial years. However, until 5th April 2025, you can also buy back any missing years from 2006/7. For some people, this can make all the difference between a seriously reduced state pension and a full one.

Don’t be complacent

If you want to top up your state pension, it’s important not to be complacent.

The deadline for buying back missing years was originally April 2023, but this has been put back to April 2025. It was changed to help make sure people didn’t miss out.

However, if you’re thinking of buying back any missing years just before the April 2025 deadline, we strongly advise you not to leave it so late.

While the government has released an online tool for you to top up your state pension, not everyone will be able to use it before the deadline. This includes many self-employed people.

You can’t currently use the tool if:

• You’ve been self-employed for any of the years for which you want to top up your state pension
• You’re already of state pension age
• Your National Insurance record is being updated at the moment
• You lived abroad for any of the years you want to top up
• You’re eligible for Home Responsibilities Protection
• You have a Married Women’s Reduced Rate Election certificate

Surely I can just top up my state pension by phone?

Yes, it’s possible to top up your state pension by phone. But it’s not simple. You have to ring up HMRC and get an 18-digit reference number. You can then use this to pay by app or online, by bank transfer, or by cheque. Then you have to wait up to 60 days for your National Insurance record to be updated.

If you’re willing to do all this, it’s important to remember that getting in touch with HMRC by phone is often difficult. In the run up to the previous deadlines (before they were moved), HMRC’s phone lines were jammed. Indeed, this is one of the reasons why the state pension top up deadline got pushed back to April 2025.

If you’re an optimist and think HMRC might have resolved its phone line issues, then good luck to you! In the year ending June 30, 2024 taxpayers in the UK collectively spent more than 719 years on the phone waiting to speak to HMRC. Only 42% of those calls were actually handled by an advisor.

What should I do next?

If you want to top up your state pension by buying back years from 2006/7, our advice is to do it as soon as possible. This is particularly true if you are unable to use HMRC’s online tool.

If you’re not sure whether it’s worth topping up your state pension, THP clients can ask us for a pension review. Get in touch with your account manager today.