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How much State Pension you receive when you reach State Pension age is dependent on how many years you have contributed to it. Similarly, if you have a private pension pot, how much you put in will impact the amount of money you have in later life. Many people choose to top up either their State Pension or their private pension with the aim of obtaining more financial security during retirement.
How do I top up my State Pension?
For the new State Pension, the amount you get is based on your National Insurance record of contributions.
Usually, you need 10 qualifying years to get any new State Pension at all.
You’ll need 35 qualifying years to get the new full State Pension if you do not have a National Insurance record before April 6, 2016.
If you earn enough, you pay National Insurance contributions which go towards your State Pension entitlement.
If you are not working and are claiming benefits for reasons such as illness and unemployment, you may be able to claim National Insurance credits which also contribute to your State Pension.
You can check your National Insurance record online via the Government website, to find out if you have any gaps in your contributions.
If you have any gaps in your National Insurance record, you may be able to pay voluntary contributions to fill in the gaps.
Your National Insurance record should be able to tell you if you can pay voluntary contributions, and also how much this will cost you.
Voluntary contributions do not always increase your State Pension, and the Government website states you can contact the Future Pension Centre to find out whether voluntary contributions would benefit you.
You can only pay for any gaps in your National Insurance record from the past six years.
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However, depending on your age, you may be able to pay for gaps occurring more than six years ago.
More information on voluntary National Insurance contributions can be found on the Government website here.
Your National Insurance record won’t be able to tell you how much State Pension you are likely to receive.
So to find out how much State Pension you are likely to get, you can check your State Pension forecast on the Government website.
How do I top up my private pension?
Many people opt to have a private pension, such as through a workplace pension scheme.
While many people pay into their private pension pots regularly, some decide to top up their pensions with one-off payments too.
Private pensions qualify for tax relief, and topping up may help you to increase your pension pot for later life.
Many pension pots can be topped-up at any time, but to find out how to top-up your pension check with your pension provider.
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