While serving in the Armed Forces, you’ve been building up your Armed Forces pension. However, you’ve also been paying into your State Pension through National Insurance contributions.
A little background
Since the new State Pension was introduced in 2016, most people need 35 years of National Insurance contributions to receive the full State Pension. If you’ve paid contributions for at least 10 years but less than 35 years, you’ll receive part of the State Pension based on how many qualifying years* you have. If you have fewer than 10 qualifying years, you will not be entitled to any State Pension under this current system.
State Pension increases
The amount you receive is protected by the Triple Lock system, which guarantees that the State Pension increases each year by the highest of:
- Inflation
- Average earnings growth
- 2.5%
This helps ensure that the value of the State Pension keeps pace with the cost of living and wage growth over time.
Checking Your National Insurance Record
Even if you’re many years away from State Pension age, it’s worth checking your National Insurance (NI) record from time to time.
If you have served continuously in the Armed Forces, your NI record for that period should normally be complete. If you find any missing years, you should investigate them and challenge any errors. You may need help from DBS Veterans UK to provide evidence of the NI contributions paid on your behalf during your service.
If there are genuine gaps in your record—for example, because you took an unpaid career break—you may be able to fill them by paying voluntary National Insurance contributions (Class 3 NICs). In most cases, you can buy back up to six years of missing contributions, helping to increase your State Pension entitlement.
State Pension Age Can Change, so it is a good idea to check yours from time to time. You can also obtain a State Pension forecast – and this could be of particular interest to those of you who have not paid 35 years’ worth of NICs and do not intend working or paying Voluntary Contributions once you leave the Armed Forces.
Living Overseas
Finally, remember, if you emigrate, your State Pension is still payable. You can claim online and, once authorised, payments are made gross (so before tax). That means that you will have to declare it in your annual tax return. You do not have to pay NICs if you work abroad – but you can pay Class 3 NICs if you so wish.
Bottom line: Understanding your National Insurance record now can help maximise your State Pension entitlement and avoid unwelcome surprises when you reach State Pension age.
