Maximising your State Pension

Following the Chancellors budget last week, the full state pension will rise by 8.5% to £11,541.90 for the 2024/25 tax year. The triple lock increases the state pension by the higher of earnings, inflation or 2.5% every year and as a result, the full state pension has increased by 31.65% since 2019/20.

Is the triple lock sustainable? Who knows. The double-whammy of an increasing payment combined with an ageing population could prove too costly for future governments so to combat this, the pensionable age has gradually increased from 60 for women and 65 for men in 2010 to 66 for both today. This will increase again to 67 between 2026-2028 and again to 68 between 2044-2046. Under the Pensions Act 2014, governments can review the state pension age at least once every five years.

The point remains however, that the state pension has become an increasingly valuable asset in retirement therefore this should be planned for and maximised where possible.

To be eligible for a full state pension, you need 35 qualifying years of National Insurance Contributions (NICs), and those who have fewer qualifying years receive a proportionate pension. For example if you have 20 years of NICs, you will receive 20/35ths of the full state pension.

If you have gaps in your National Insurance record over the last six years, it may make sense to make voluntary NICs to fill them. This is most likely to appeal to those who have already retired and are due to receive their state pension soon.

Based on today’s rates, one year of voluntary Class 3 NICs will cost £907.40 to claim an extra £329.76 state pension in the 2024/25 tax year.

By doing this, you are effectively purchasing a 36.34% increasing annuity for life which could be AMAZING VALUE. Your original outlay may be repaid in less than three years.

You may also be able to claim National Insurance credits for free if gaps are on your record are due to illness, disability or maternity.

Whether or not this is suitable for you will depend on your personal circumstances.

Please be aware that this article does not constitute financial advice.

Fancy a chat in more detail about planning for retirement? Email me via or give me a call on 0113 258 6000

Check your National Insurance record here:

Read more about National Insurance credits here:

Find out more about Voluntary contributions here:

Previous Post
Improving Our Service with a new Inbox for you!
Next Post
A Steady Sip of Progress: Why We’re Cautiously Optimistic about 2024 Markets

Related Posts

No results found.