Pensions UK: new Department for Work and Pensions tool that streamlines state pension could boost your payment

A new digital service enables people to explore potential boosts to their state pension with ease, requiring only “a few simple clicks”.

Offered jointly by HM Revenue & Customs (HMRC) and the Department for Work and Pensions (DWP), the forecast service allows users below state pension age to assess gaps in their national insurance (NI) record.

They can then opt to make voluntary contributions to address these gaps, if it will benefit them. The service provides users with insights into potential increases in their state pension, and outlines the necessary voluntary NI contributions required to achieve this.

Users can select the specific years they wish to address, and can securely make payments through the service. Upon completion, they will receive confirmation of payment receipt and an assurance that their NI record has been duly updated.

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How does it work?

Paying voluntary contributions will not always increase someone’s state pension but people can use the new service to help weigh up whether they could be better off in retirement before making any voluntary NI payments.

Some people may be eligible for national insurance credits, rather than needing to pay voluntary contributions.

People will need to log in to the new digital service using their personal tax account login details. Those without an online HMRC account can register on gov.uk.

People can usually pay voluntary contributions for the past six tax years. The deadline is April 5 each year.

Last year, the Government extended the deadline to pay voluntary NI contributions to 5 April 2025 for people affected by new state pension transitional arrangements.

People who are eligible have until 5 April 2025 to pay voluntary contributions to make up gaps in their NI record between 6 April 2006 and 5 April 2018.

From 6 April 2025, people will only be able to pay voluntary contributions for the previous six tax years, in line with normal time limits.

Sir Steve Webb, a former pensions minister who is now a partner at consultants LCP (Lane Clark & Peacock) said: “Until now people have had to battle through on two different phone lines – one to check with DWP which years they can top up and then one to HMRC to get a reference number to make a payment.

“It must be a step in the right direction to be able to do all of this without hanging on a telephone. However, simply getting your NI record updated by HMRC is only half of the story.

“It then needs DWP to reassess your state pension entitlement based on your improved contribution record.

“There are already too many cases where people wait months or longer to get their pension figure revised. It is vital that the Government puts in place new capacity at DWP to process all of these changes; otherwise they will simply have created a new bottleneck in the system.”

Who can use the service?

The new digital service is not currently available to those who are already receiving their state pension, who are self-employed or who are living outside the UK with gaps incurred while working abroad.

What difference could it make?

Pensions minister Paul Maynard said: “I would encourage everyone to check their state pension forecast and to take a look at how they could improve their state pension award with only a few simple clicks.”

Alice Haine, personal finance analyst online investment service at Bestinvest by Evelyn Partners, said: “Whether someone needs to top up will depend on how many more years they plan to work and whether they are eligible for NI tax credits, which fill the gaps – such as those who are sick, were unemployed or took time out to raise a family or care for elderly relations.”