PLENTY of people rely on the state pension in retirement but there are a number of ways to boost it by thousands.
The maximum new-style pension you can get is £185.15 a week, or around £9,627 a year.
1
This is going up by 10.1% from April following the government’s Autumn Statement.
That means the weekly allowance will rise to £203.85.
While the state pension might not be enough to live off alone, getting the most from it can give your finances a big boost.
So here are five things you can do to boost your state pension in 2023.
Delay taking your state pension
The current state pension age is 66 but this is set to rise to 67 and then 68.
But just because you’re eligible to claim it doesn’t mean you have to.
Your state pension increases every week you defer, as long as you defer for at least nine weeks.
It goes up by 1% for every nine weeks you defer. This works out as just under 5.8% for every 52 weeks.
Most read in Money
So under the current state pension weekly rate, you’d get £10.70 extra a week if you deferred your pension for 52 weeks – or £556.40 a year.
Make extra NI contributions and fill the gaps
To qualify for the new state pension you need at least 10 years’ worth of national insurance contributions, and to get the maximum you need at least 35 years national insurance years.
But if you don’t have enough contributions to get the full state pension, or any at all, you can choose to buy extra credits.
You can do this before state pension age and when you reach it.
You can claim extra NI contributions by buying Class 3 National Insurance credits. They currently cost £15.85 a week, or £824.20 for the whole year.
For those with gaps in their record on or after April 6, 2016, you can add 1/35 to your state pension for life.
This may not sound like a lot, but it would boost your state pension by over £200 each year.
So it would take less than four years of getting more from the state pension to recoup the money you’d have to pay out for contributions in the first place.
And you would of course get this boosted state pension for the rest of your life.
You can find out more about making voluntary National Insurance contributions on the Government’s website.
Apply for National Insurance credits
NIC’s are a way of maintaining your National Insurance record if you are not making contributions through work.
They help you to build up qualifying years over time, which you can use to make you eligible for basic state pension and other benefits.
But you have to meet certain criteria to be eligible for the credits.
You can get them if the following applies:
- You’re on Jobseeker’s Allowance and not in education or working 16 hours or more a week or you’re unemployed and looking for work, but not on Jobseeker’s Allowance
- You’re ill, disabled or on sick pay
- You’re on maternity, paternity or adoption pay
- You’re a parent who has registered for child benefit for a kid under 12, you want to transfer credits from a spouse or you’re a foster carer
- You’re a carer on carer’s allowance, on Income Support and providing regular and substantial care or you’re caring for one or more sick or disabled person for at least 20 hours a week
- You’re a family member over 16 but under State Pension age and you’re caring for a child under 12
- You’re on working tax credit or universal credit
- You’re on a training course or jury service
- Your partner is in the armed forces
- You’ve been wrongly imprisoned
But other eligibility rules apply too. You can find out the full list of who’s eligible to claim credits on the Government’s website.
You can either apply online or will have to contact your local Job Centre to receive the credits.
Be careful with the child benefit trap
Child benefit is paid to parents to help with the cost of childcare.
But the lowest earning person could be missing out National Insurance credits.
This might happen if a child benefit claim is under the highest earner’s name in the household.
Someone who receives child benefit for children under the age of 12 is treated as if they had paid NI contributions for that week.
But it means if the lower earning person in the household didn’t make the claim they’ll miss out on NI credits that count toward their state pension.
Meanwhile, grandparents who haven’t yet reached retirement age and care for their grandkids could also be missing out.
One grandmother previously told The Sun she lost out on £800 a year in state pension payments.
National Insurance Credits can be passed from a parent to grandparent doing childcare, but only if the parent is claiming child benefit themselves first.
The grandmother of two missed out because her daughter wasn’t claiming.
But, the good news is that parents and grandparents who find out they have been missing out on payments can backdate claims for National Insurance credits for three months.
But, it does mean that they could miss out and lose thousands in state pension payments later on.
Claim extra benefits
If you’re already retired and get a small income through the state pension you could get extra cash.
This is because hundreds of thousands of pensioners are missing out on thousands of pounds a year via pension credit.
The average weekly amount of pension credit is £65, or more than £3,300 a year.
Of course, how much you can get depends on your specific circumstances, including whether you have a partner, you’re disabled, and whether you have caring responsibilities for young children.
On top of the extra money pension credit provides, you can get freebies such as free TV licence if you’re over 75, and a council tax reduction.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
