Britons urged to max out state pension as it would cost £260k to replace

People who have gaps in their National Insurance record and are not on track to get the full state pension have been warned this could “cost you dearly”.

Fidelity International has compared how much the state pension is worth compared with other pension options such as drawdown pensions or an annuity.

The firm urged people to make sure their National Insurance (NI) contributions are topped up and they are on track to receive the full state pension as it is “extremely valuable” and “very expensive” to replace.

The group calculated the current full new state pension, at £203.85 a week, would cost £205,430 in contributions to create an equivalent annuity, at current annuity rates of 5.16 percent.

It would cost even more to replace the full state pension payments with a drawdown pension scheme, which would cost £265,005, with a four percent withdrawal rate. Fidelity based the figures on the current rates as featured on

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Ed Monk, associate director at Fidelity International, said: “The reason it costs so much to replace is that the state pension is both guaranteed and protected against inflation – two things that are precious and difficult to replicate any other way.”

State pension payments are currently guaranteed to increase each year in line with the Government’s triple lock policy.

This ensures payments go up in line with the highest of 2.5 percent, the rate of inflation or average earnings.

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A person can check how much state pension they are on track to receive using the state pension forecast tool on the Government website.

An individual usually needs 35 years of NI contributions to get the full new state pension, and 10 years of contributions to get any payments. They would typically need 30 years on their National Insurance record to get the full basic state pension, which is £156.20 a year.

People with gaps in their NI record can voluntarily pay contributions which may increase their state pension.

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This scheme usually allows people to top up their contributions up to six years ago but at present this is extended by another 10 years, as far back as the 2007/2008 tax year.

The deadline for people to buy contributions for this extended period was recently extended, until April 2025.

A person can also increase their state pension payments by deferring when they start to claim.

To do this, a person simply has to refrain from putting in a claim for their state pension when they reach state pension age, which is currently 66.

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