MARTIN Lewis’ MoneySavingExpert has revealed an easy step that workers can take to boost their state pension and it could turn £800 into £5,500.
You could risk losing out on thousands of pounds if you fail to take action sooner – but it’s a simple check.
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It takes 35 years of National Insurance contributions to get the full amount of state pension and you can pay for gaps in your record.
At the moment you can top up for any missing years dating back to 2006 but a six-year limit will return in April 2023, restricting how far you can go back.
In the latest MoneySavingExpert weekly newsletter, Martin Lewis and his team warned that you could risk losing a decade’s worth of payments if you miss out on the crucial step.
National insurance contributions are usually taken directly from your wages if you’re employed or via self-assessment for the self-employed.
People often have gaps if they were unemployed, on a low income, or self-employed.
You can check how many years of NI payments you’ve made and see any missing years on the government website.
Until 5 April 2023, workers looking to top up their payments can go back so far as 16 years in the past, which is particularly useful for those near state pension age.
Though before making voluntary contributions, you need to get a pension forecast and speak to the Government’s Future Pension Centre on 0800 731 0175.
The body will be able to tell you whether it’s worth you paying for extra qualifying years, as it may not be beneficial for everyone.
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How much will it cost me and is it worth it?
Earning back the years isn’t free so your voluntary contributions do come at a price.
It works out to be worth £15.85 a week which means it costs £824.20 to buy one year of contributions.
This will add £275 to your state pension every year.
A man living the typical 19 more years and a woman living 21 more years after they reach the state pension age of 66 can expect to get £5,300 and £5,800 respectively.
Martin Lewis’ MoneySavingExpert claims it will take just three years after getting your pension to break even.
But of course, there are risks – if you happened to die before the three years are up then you will have wasted the money, the savings experts explained.
Changes to pensions were introduced in April and they could affect how much you have in your pocket – here are the new rules.
Besides topping up missing NI payments, we explain other ways you can boost your state pension by up to £700 a year.
Plus, pensioners on low income could get extra help from Pension Credit – here’s how.
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