ANYONE nearing retirement can now find out if they could get higher pension payments with a new online tool – and it only takes a few minutes.
The state pension checker has been launched to help people find out if they could boost the amount of state pension they get by paying voluntary national insurance contributions.
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State pension payments are made once you turn 66, if you qualify.
It all depends on how long you’ve worked and how much national insurance you’ve paid over your lifetime.
You will need to have 10 years of National Insurance contributions (NICs) to get any money at all.
And to get the maximum amount worth £185.15 under the new pension system, you’ll need 35 years of recorded NICs.
But you can fill in the gaps by making voluntary contributions if you don’t have enough.
The new, free state pension checker tool from pension experts LCP, will show if you could benefit from topping up your state pension.
The information you’ll need to hand include what you’re forecasted weekly state pension is and a list of years from 2006/7 onwards that show as not full on your national insurance record.
You can check your state pension forecast on the government website.
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Users of the tool should be aware that that website gives helpful information and not financial advice.
It can also guide you to the government website where you can check your station pension forecast and find information about your own National Insurance record.
Former pensions minister and LCP partner Steve Webb said: “I regularly hear from people who would be interested in boosting their state pension but are confused about whether they can do so and how to go about it.
“At its best, topping up your state pension can generate a tremendous rate of return, far better than almost any other way of using spare capital.
“But there are many pitfalls to avoid, and we hope that our new website will help people to navigate the labyrinth of boosting their state pension.”
How can I make voluntary national insurance contributions?
You can make voluntary national insurance contributions before state pension age and once you reach it.
Most people will do this by buying what’s known as class 3 national insurance credits to fill gaps in their record at a cost of £15.85 a week for the 2022/23 financial year.
So to get a whole year’s worth, and you’d pay £824.20.
This may sound like a lot, but it could boost your state pension by over £200 each year.
This means it would take less than four years of getting more from the state pension to recoup the cash you’d have to shell out for contributions in the first place.
You would continue to get this boosted state pension for the rest of your life.
You should bear in mind that you can usually only pay for gaps in your national insurance record from the past six years.
The rules on how much you pay are also slightly different if you’re self-employed and buying class 2 contributions.
You can find out more about making voluntary National insurance contributions from gov.uk.
The rules are complex so it could be worth seeking financial advice or contacting the Future Pension Centre to find out if you’ll benefit from making extra payments.
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