Pensions - Articles - Huge surge in people topping up their state pension

 The latest report shows that in 2018/19 £119.3m was paid in voluntary ‘Class 3’ National Insurance Contributions. This compares with just £12.8m in 2016/17 – a ninefold increase in just two years.

 The chart shows the total figure has grown over the period:

 
 
 Although a small amount of voluntary NICs is accounted for by people filling gaps to protect their entitlement to short-term benefits, the surge in payments is likely to reflect the introduction of the new state pension in 2016 which gives large numbers of people the opportunity to boost their pension through voluntary contributions.

 Commenting, Steve Webb, Director of Policy at Royal London said: ‘It is great news that the message is getting out there that topping up your state pension can be a very effective way of using your money. For those who will not otherwise get a full state pension, the cost of voluntary NICs will often be recovered in full within three or four years of retirement, as the rate is heavily subsidised by the government. But it is important to be careful which years are bought back, as in some cases paying extra NICs will not always increase your pension’.