Full state pension is only available to those who have an adequate national insurance record. Full entitlement normally requires at least 35 qualifying years. If you have any missing years - for whatever reason - then you will only be entitled to a partial pension. And if the gap is substantial there may be no entitlement at all.
How do the missing years arise? There are all sorts of scenarios. Perhaps you relocated to this country well into your working life. Perhaps you chose not to work for a spell, engaging in some volunteer activity or charitable works. Perhaps your income in your early working life fell below the NI contribution level. Perhaps you have taken early retirement.
From 6 April 2023, you will only be able to make good missing contributions for the standard 6 years - that is for 2017/18, 2018/19, 2019/20, 2020/21, 2021/22, and 2022/23.
But the Government is currently offering the facility to make good years going back to 2006/07. That is 17 years up to and including 2022/23.
But is it worth it...? Voluntary contributions are paid under Class 3 NIC at the current rate which is £15.85 a week. Let's take a look at Elsie...
Elsie is approaching pension age. She takes advantage of the tools on the Government website and establishes that she has 3 missing years of NIC. As a result her weekly/annual state pension at 2022/23 rates will be as follows:
Full weekly amount 185.15 9,627.80
Less 3/35 years 15.87 825.24
Abated Pension £169.28 £8,802.56
Elsie is in good health and has a pragmatic approach to her financial affairs. Both of her parents lived into their 90's. She reckons it is a risk that she can take. So she puts in a claim to pay voluntary contributions for the missing years which happen to be 2010/11, 2011/12 and 2012/13. Her rough calculations are as follows:
To pay out:
2010/11 £15.85 x 52 = 824.20
2011/12 £15.85 x 52 = 824.20
2012/13 £15.85 x 52 = 824.20
Pension made good: £2,475.72. (£825.24 x 3 years)
After three years it's a winner!
It is crucial that you check your National Insurance record to see if there are any missing years' contributions for tax years prior to 2017/18 before the opportunity of making good is permanently lost. Use it or lose it!