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It’s not surprising that you might be.


Under the new State Pension, you need 35 qualifying years to get the full amount, currently £168.60 per week.


So why does your National Insurance Record show that you have more than 35 years of full contributions, but your State Pension summary shows that you have not earned the maximum amount?



The impact of ‘contracting out’


If you have been previously contracted out of the additional State Pension (also known as State Second Pension or SERPs), the amount of State Pension earned is reduced.  This is because contracting out was a means of re-directing some of your National Insurance contributions, and giving up part of the State Pension, in exchange for a private pension.

This could mean that you have gaps in your National Insurance record which you may be able to fill by making voluntary contributions.  You cannot increase it beyond the full amount and you can only fill gaps from the previous 6 years.

Your National Insurance record can be obtained at  However, whilst it will show you which years can be paid to make up the shortfall, it doesn’t tell you how many years you need to make up the shortfall.  In fact, it may lead you to believe the shortfall is actually greater than it is.



A personal story – Knowing when to top up


As an example, a client recently sent us their National Insurance record.  It stated that she had: –

  • 41 years of full contributions
  • 2 years to contribute before 2021 (up to retirement)
  • 7 years when they did not contribute enough

You would be forgiven for thinking this meant she had to make up 7 years’ worth of contributions to receive the maximum State Pension.  This is what our client assumed. She chatted with friends and family about possibly topping up her contributions. It was going to be costly, right? So, she’d have to live a very long time to get a return.

The misleading information led our client to conclude that it probably wasn’t worth doing. However, this was not the case.



Getting a return within 2 years


The 7 years in question had various shortfalls ranging from £375 to £780 per annum, and in total amounted to £3,700.  Bear with me, as the devil is in the detail.

The State Pension Forecast showed the following: –

  • Estimate based on NI record up to 5 April 2019 £154.48 per week (£8,032 pa)
  • Forecast if you contribute until 5 April 2021 £164.11 per week (£8,533 pa)
  • The most you can increase your forecast to £168.60 per week (£8,767 pa)

The difference between what had been earned and the most that could be earned was £14.12 per week.  As each year’s full NI contribution earns £4.82 per week in State Pension this difference equates to 3 missing years.

It was then possible to choose the 3 years with the lowest amount of shortfall and pay additional voluntary contributions to make this up.  In this case, for a one-off shortfall cost of £1,425, the State Pension would increase by £734 per annum, to the maximum amount.

Not only could the cost of this be recovered within 2 years, but during the life expectancy (age 87*) of this lady born in 1955, this could potentially be worth £14,680 in increased pension income (excluding any increases in line with the triple lock guarantee).



What to do next


If you are at all unclear about your projection and/or shortfall, you can contact HMRC for information about your State Pension on 0800 731 0469. Alternatively, get in touch with us and we’ll see how we can help.


*Using the Office for National Statistics Life expectancy calculator

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