Money expert Martin Lewis has revealed a ‘big money’ state pension change which can add £13,000 to your pension in retirement – and costs you nothing.
Martin returned on the latest episode of The Martin Lewis Money Show Live this week on March 4 to tell his audience about the National Insurance buy-back deadline, which will pass on April 5. But there is another way you can get extra money added to your state pension payments in future without spending any money on buying extra years, Martin said, with a claim for one type of benefit. This year, 13 years of National Insurance records will be closed to buy-backs from April 5. This is important because you need 35 years of records to qualify for the full state pension, currently £221.20 per week, and if you don’t have a full record, you can buy missing years for roughly £800 per missing year to add thousands back onto your payouts.
But using Grandparents Credit is a way to get extra National Insurance years added to your records for free.
Co host Jeanette Kwayke read out a letter Martin had received on the show. It said: “I wanted to say a big thankyou to you Martin for covering grandparent pension credit.
“After hearing about this I was able to claim a few missing years whilst looking after my granddaughter.
“It took eight months to hear back as they’ve got a backlog but I recently got a letter to say I was eligible and this has saved me having to pay a huge £1,600 [buying missing years of National Insurance] to enable me to get the full state pension.”
Martin then replied: “It’s always worth me translating that; assuming that’s two years that you bought then that’s £660 a year on your state pension. If you live for 20 years then you’re talking £13,000, it’s not £600 its £13,000 on your state pension.
“This is just such big money.”
Grandparents Childcare Credit works by transferring tax credits that would normally go to a parent who is taking time out of work to look after a child to a grandparent who has looked after the children instead.
By giving the grandparent a National Insurance year for this, it means the grandparent has gained an extra year of NI records for their pension calculation at no extra cost.
Only childcare you provided before you reached state pension age counts but you can ‘backdate’ your claim all the way to 2011.
The Martin Lewis Money Show Live is still available to watch via ITVX.
