Replacing your State Pension could cost a fortune

Paying to replace the equivalent of your State Pension would not be cheap!

Recent news the State Pension booster scheme has been extended until 2025 is very welcome, but did you know it could cost you a small fortune to replace the full State Pension if you’re not eligible for it?

Data from published in June has shown it would cost just over £205,430 of pensions savings to replace the current full State Pension of £203.85 a week.

For many people, that’s a significant amount, so even if you had thought yourself well covered by works or private pension provisions you have, it is well worth ensuring you can receive the full State Pension.

It is based on National Insurance (NI) contributions you have made during your working life and to be eligible for the full pension, people will have needed to make NI payments for 35 complete years.

There are various reasons why someone may not have reached the maximum amount – they may have taken time out from the workplace to raise children or care for elderly relatives, or they may have worked abroad or had very low earnings for a period.

Or if self-employed, they may not have kept up with the NI payments, which have to be paid ‘manually’ rather than having them deducted at source by an employer.

The £205,430 figure is what it would cost to buy an annuity to replace the State Pension, Fidelity International has reported. In June it said the rates on annuities paid to a healthy 65-year-old is around 5.16%.

That is with income payments rising by 3% a year to combat price increases – not the full protection against inflation the State Pension enjoys thanks to the ‘triple lock’ (the promise to raise the payment by the greater of inflation, wage rises or 2.5%) but still valuable.

The firm also points out income drawdown is another option – if someone withdraws around 4% a year from their pension pot and still had a good chance their savings will last for 30 years, they would need just over £265,000 to recreate State Pension income. That option also carries several other valuable benefits although it is not suitable for everyone.

The good news is if you have gaps in your NI payment history, or believe you might, the increase to the booster scheme deadline gives you time to do something about it.

Normally you can only ‘buy back’ NI contributions for the past six years, but the one-off scheme allows you to make good any gaps going back a further 10 years to 2007.

The deadline is now April 5, 2025, but it is worth bearing in mind that is a long time in politics and there is no guarantee a future government will not overturn the legislation, so best not to leave it too late.

You can check your state pension forecast by contacting the government’s Future Pension Centre on 0800 731 0175 if you are below the age of 66 — or the Pension Service if you are above pension age on 0800 731 7898. Or go online at

To establish what you need to pay if some is missing, call the National Insurance Helpline on 0300 200 3500 and an adviser will confirm the amount per year and give you an 18-digit payment reference.