I have a nine year NI record, so how can I upgrade it?

I have been told that I cannot get a state pension because I have only paid premiums for nine years. I was born in March 1953. At the moment I am still working.

I was told I had just missed 10 years. Could you please tell me if there is anything I can do to change this?

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Steve Webb answers: For much of the time the state pension system has been in effect, there was a minimum level of contributions that had to be paid before any pension could be paid.

Until 2010, it was mandatory to have at least 25 percent of your working life premium and since 2016 the rule has been that you must have premium or credit for at least 10 years.

Only for those who reached retirement age between 2010 and 2016, there was no minimum contribution level.

As a man born in March 1953, you will be covered by the new AOW because you reached the state pension age in March 2018.

Since you are just a year short of the minimum number of contributions required to receive a state pension, you can look for gaps in your NI record that can be filled by making voluntary contributions for a year.

Until April 5, 2023, you can go back to any year from 2006/07, and if you only have nine years in the system, you must have at least one gap year since then. I assume you lived in the UK and were eligible to pay the National Insurance for the year in question.

In principle, this can be very attractive to do. Voluntary national insurance contributions are already very good value for money, but if they make the difference between getting a pension or not, they become even more valuable.

To show you how this works, take a look at someone like you who has paid premiums for 9 years and has no pension. An extra year of voluntary ‘Class 3’ NICs currently costs just over £824. But if you buy a year, your AOW goes from zero to 10/35 of the full rate.

This gives you a weekly pension of £52.90 or an annual pension of around £2,750. Basically, you should get your money back within a year.

If you have other gaps, you can also consider filling them. While the impact wouldn’t be as dramatic (for example, you could go from 10/35 full rate to 11/35 full rate by buying another year), it could still be a good value.

Before you pay money, you must first check with the DWP ‘Future Pension Center’ who can explain your options.

Besides talking to the DWP, there are a few other things to think about before proceeding.

The first is to see if there is a knock-on effect on any benefits you will receive if you stop working.

If you do not have a state pension and receive little other income from the household, I can imagine that you will receive a benefit such as a pension discount.

Then it may not be a good idea to spend money on supplementing your AOW. Any increase in your pension would result in a reduction in your pension credit and you may not be better off overall.

The second thing you should check is whether you were entitled to national insurance contributions in recent years that are not included in your records.

To give an example, if the reason you had a gap was that you were taking care of a child and receiving child support, then you may be able to get NI credits.

Or if you registered and claimed benefits such as unemployment benefits, you should receive credits for that period.

If you can fill a gap through credit instead of paying NI contributions for a year, then that obviously makes more sense.

You will find a detailed description of all the different NI credits available in a guide I wrote here.

Finally, if the reason you have only been paying premiums for 9 years is that you came to the UK relatively late in your working life and you made contributions in another country, there are some situations where this could help you meet the ’10-year rule’.

The rules are complex and it depends on which country you have worked in, but there is more information here.