MARTIN LEWIS WARNS 'CLOCK’S TICKING' FOR PEOPLE AGED 45 TO 73 TO TURN £800 INTO £5,400

Martin Lewis has warned the “clock’s ticking” to check if you can boost your state pension by potentially thousands of pounds ahead of a key deadline.

It involves checking your National Insurance record to see if you have any gaps that need filling. This is important, as most people need 35 years - some will need more - to claim the full new state pension. You normally need ten years to get any sort of state pension at all.

At the moment, you can pay to plug National Insurance gaps dating back to 2006 - but from April 2025, you'll only be able to pay for voluntary contributions for the past six tax years. Writing in the latest MoneySavingExpert.com newsletter, Martin explained how the most you'll pay to purchase a full year class 3 National Insurance contribution is £824. This then adds up to £328 each year to your pre-tax state pension.

Explaining the impact that could have on your pension over the course of your retirement, Martin said: "A man living for the typical life expectancy would get a total £5,400 back, a woman £6,100 as life expectancy is longer." He added: "While 'boosting your state pension' doesn't sound sexy, it's the MOST LUCRATIVE THING many can do with their money."

If you're self-employed, you can buy class 2 contributions for around £160 a year. Martin recommended doing the check if you're near retirement age, while if you're aged 45 to 60ish it is "less definite" that you'll need to pay to fill gaps, as you may still naturally plug any holes in your record. He explained: "The younger you are, the more time you have to earn enough qualifying years before you reach state pension age."

To see if you'd benefit from purchasing missing National Insurance years, you should first check both your National Insurance record and your state pension forecast. Next, you should then check if you can plug any gaps for free.

For example, you may be able to get free National Insurance credits if you were entitled to Child Benefit but did not claim it, or if you are a grandparent and provided childcare. There are more examples of ways you may be eligible for National Insurance credits on GOV.UK. You also need to check if the gains from buying extra years may be reduced if it pushes you into the higher 40% tax bracket.

Contact the free Future Pension Centre on 0800 731 0175 before buying any National Insurance contributions to check if you'd benefit from plugging any gaps in your National Insurance record. If you're already at state pension age, contact the free Pension Service helpline on 0800 731 0469.

Some people can now purchase voluntary National Insurance contributions online thanks to a new service that launched last month. However, you can't use this initial version if you've already started claiming your state pension or if you're looking to fill gaps from when you were self-employed or working abroad.

2024-05-08T08:33:03Z dg43tfdfdgfd