How to boost your state pension by up to £149,000: It’s ‘one of the best investments you can make’ – but a deadline is looming

More than 10,000 savvy savers have topped up the value of their state pension since April – one by a whopping £148,922 – using a rare offer from the government.

A special window has opened allowing you to buy up to 11 additional qualifying years for your state pension, if you have gaps in your National Insurance (NI) record.

But hundreds of thousands of people who still need to increase their retirement income have just three months left to do so.

The generous one-off offer is described by experts as ‘one of the best investments you can make’.

The scheme means you can spend up to £8,240 and get an increase of £88,306 in your income over a 20-year retirement, assuming the state pension rises each year under the triple lock, according to calculations by asset manager Quilter.

Savers have made more than 10,000 payments worth £12.5 million to boost their state pensions between April and October alone via the government’s new dedicated online service.

In the most extreme example, one saver has managed to increase his state pension income by almost £149,000. This would cost an estimated £15,500 today.

The deadline for taking up the offer was due to be April 2023 but was extended twice after Money Mail and This is Money warned that many anxious savers were unable to top up their pensions due to administrative chaos at the Department for Work and Pensions.

The deadline was pushed back to April 5 this year, meaning savers now have less than three months to take advantage of the generous offer.

So how do you know if you’re one of the hundreds of thousands who can make a profit? Here we explain everything you need to know to benefit from this and how much it will cost you to increase your state pension later in life.

How much AOW should I get?

The AOW pension is currently paid from the age of 66 and the amount you receive depends on various factors. This includes when you reached retirement age, how many years you worked, your type of employment (self-employed or employed) and how much you earned.

There are two types of state pension. The ‘basic’ state pension is paid to those who reached retirement age before April 6, 2016. The new ‘lump sum’ state pension will be paid to those who reach retirement age after that date.

Anyone on a ‘basic pension’ needed 30 years of NI contributions to qualify for £169.50 a week – or £8,814 a year. There were several top-ups, including the second state pension, but this was influenced by so-called ‘outsourced’ pensions.

Those receiving the ‘new’ state pension will need 35 more years of NI contributions to receive the full amount – £221.20 per week, or £11,502 per year.

Anyone who has not met these NI requirements will receive a smaller pension upon retirement. It is therefore important to identify any deficiencies if you were not aware they had occurred.

How can I increase my AOW?

The main way to increase the amount of state pension you receive is by closing any gaps in your NI contribution record, a process known as state pension top-ups.

You can pay to buy missing NI contributions for specific years where you have not paid them, or where you have not paid enough NI to increase the entitlement.

This is different to the NI contributions that employees pay each month, which are paid as a percentage of your income.

You would like to make voluntary NI contributions of €17.45 each week this tax year. So if you wanted to fill a full year, it would cost €909.95.

At current rates, this increases your pension by €329 per year. That’s £6,573 over a 20-year pension period – without taking into account any increases in the state pension under the triple lock. This is the rate for Class 3 premiums, the most common type paid by employees.

Self-employed people typically pay the Class 2 rate, which is much lower than employees – currently £3.45 per week, or £179.90 per year. This means that it costs much less to fill gaps in a record, but it results in the same increase in the state pension.

If you have a partial year, for example where you worked part of the year but didn’t pay enough NI to make it a qualifying year, then the price to fill that year will often be a lot cheaper than a year that you have missed entirely.

Most savers who increased their state pension this year paid a year’s worth of NI contributions, paying an average of £1,193, according to official figures.

The biggest increase anyone made to their state pension was £107.44 a week. A Money Mail analysis shows this could rise to almost £149,000 for someone living to the age of 90 and the state pension will rise by at least 2.5 per cent under the triple lock.

What is the deadline?

Normally you can only fill gaps in your NI file that date from the last six years. But there is currently a one-time window open that allows you to fill in any gaps dating back to 2006.

You have until April 5, 2025 to submit an application and make the payments. After that, the rules return to normal and you can only cover the past six years.

But it’s important not to leave it to the last minute if you’re planning on doing historical upgrades.

The Government has already postponed the deadline to give those struggling to reach the Department for Work and Pensions the chance to top up their money. This means they are unlikely to do this again.

Jon Greer, head of pensions policy at Quilter, said: ‘While April 2025 may seem a long way off, it’s crucial to start the process early if you want to avoid missing out on a substantial increase to your state pension.

‘Previously there were reports of jammed telephone lines and delayed processing due to the large number of last-minute requests.

‘To avoid these issues, it is important to consider making an additional voluntary NI top-up as soon as possible and using the Check your State Pension forecast tool by logging into their online account or via the free and secure HMRC app.’

How do I know if I can take advantage of the offer?

A new online tool for AOW supplements was launched last year.

You can consult your AOW forecast online and purchase supplements at gov.uk/check-state-pension.

To check your NI contribution statement and how much you are on track to receive from the state pension, contact the Future Pension Center on 0800 731 0175 if you are under 66, or the Pensions Service for those over pensionable age age on 0800 731 7898. You will be asked for your name, date of birth and NI number.

They can tell you for which years you are eligible for extra premium and whether you will benefit from it.

There are several reasons why you may miss several years of NI contributions.

For example, you may have been working part-time, earning less than the threshold for NI payments to be paid, or have been away from work for a period of time to care for children or elderly relatives.

Those who cared for children or elderly relatives who needed care can get free credit — and for other things, too. Check this first, we will explain more in our AOW supplement guide.

If you transfer the money without checking first and it turns out you’ve made a miscalculation, you risk losing that money forever as HM Revenue and Customs won’t always reimburse you.

Once you know exactly which years of missing NI contributions you want to fill and how much you need to pay, you will need to make the payment to HMRC. First you need a reference number.

Call the National Insurance Helpline on 0300 200 3500. An advisor will confirm how much you have to pay per year and give you an 18-digit payment reference. You can then make the payment via your internet banking via the government website.

Select the ‘pay via bank account’ option. You will then be asked to log into your online or mobile bank account to authorize your payment.

You can also send a check by post to: HM Revenue and Customs, National Insurance Contributions and Employer Office, BX9 1AN.

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