The current State Pension is £11,502 and is expected to increase to around £12,000 per year for 2025/26. At current annuity rates, it would require over £300,000 to purchase an index-linked annuity starting at £12,000 annually, making it crucial to maximise your State Pension entitlement.

To receive the full State Pension, 35 qualifying years are needed, but is it worthwhile to top up voluntary Class 3 National Insurance contributions for any missing years? This is ultimately a financial decision, but the break-even period is relatively short. For employees, it’s around 3 years, and for the self-employed, who can pay Class 2 contributions for missing years, the period is even shorter. You may also receive credits for missing years if you weren’t working due to raising children.

Employees can make Class 3 contributions of £824.20 or £907.40 per year for additional years, which provides £302.86 annually in extra State Pension. Self-employed individuals can pay Class 2 contributions at £179.40 for each missing year, yielding the same £302.86 per year.

Usually, you can only go back six years to cover any missing contributions, but there is currently an opportunity to fill in gaps dating back to 2006/07. The deadline for this extended carry-back period is 5 April 2025.