Martin Lewis has urged people aged between 40 and 73 to check if they can boost their state pension rates by thousands of pounds. April 5 marks the final day people can plug gaps in their National Insurance records dating back to 2006.
After April, people will only be able to date back six tax years to make contributions, which can cause them to lose thousands of pounds. People accumulate NI years through active employment or by receiving National Insurance (NI) credits, which are granted during periods of unemployment, illness, or while fulfilling parental or caregiving responsibilities. Most people will need around 35 years of contributions to receive the full new state pension, but some may need more.
Those who have gaps, which may have occurred when credits weren’t claimed, can increase their state pension by purchasing additional NI years to fill these gaps.
In his latest newsletter published on April 1, the Money Saving Expert founder wrote: “I’ve nagged you about this for years, and now this is it. After multiple extensions, this Saturday is the final deadline. It’s your last chance to check whether you’ve National Insurance (NI) gaps from 2006 to 2018, and if so, whether plugging them will add huge amounts to your State Pension.”
He added: “This is the most lucrative thing men born after April 5, 1951, and women born after April 1, 1953, can do right now.”
Mr Lewis explained that those who took time off work, earned a low income, lived abroad, were a carer, or didn’t claim the right credits when looking after their children might be missing NI years. This means they won’t get the full new state pension, which is currently worth £221.20 per week.
Some can recoup years for free by claiming the credits they were previously entitled back, while others may have to purchase the missing years.
For those who need to pay for a full year, Mr Lewis said: “It costs the self-employed £180ish, employees £800ish. Each extra year usually boosts your annual pension by £330, currently meaning an inflation-proofed £6,000 extra for those living to typical life expectancy.”
However, it should be noted that while purchasing missing National Insurance years to plug gaps may be beneficial for some people, it may not be for others.
People can see if they’d benefit by checking their National Insurance record and online state pension forecast service on the GOV.UK website.
