A man has managed to boost his state pension by £21,000 after following a tip from Martin Lewis.
The Money Saving Expert founder has been raising awareness for people to check their National Insurance records to ensure they aren’t missing any years. Those who are could be losing out on their full state pension entitlements, depending on how many gaps they have.
To address the issue, people can purchase years back for a few hundred pounds and in doing so, can end up increasing their total state pension entitlement by thousands.
After watching the topic be covered on the Martin Lewis Money Show, viewer Martin Clark tweeted the financial guru: “@MartinSLewis You are a star, sir. I asked about my voluntary National Insurance contributions and I was 4 years short.
“If I pay £2,536 (1 year is £63.40), I get an extra £20.83 a week. Over 20 years I’ll get an extra £21,000. Thank you.”
Mr Lewis said: “While ‘boosting your state pension’ doesn’t sound sexy, it’s the most lucrative thing many can do with their money.”
He added: “Don’t delay. While today you can buy missing years back to 2006, soon it’ll only be to 2019.”
At the moment, people are able to fill in gaps dating back to 2006 after a deadline extension made last year. However, the timeframe is due to be reduced back to just six years’ worth of gaps when this tax year ends in April 2025.
The tip is aimed at those who will qualify for the “new” state pension introduced in 2016, which applies to all men born after April 5, 1951, and women after April 5, 1953.
Mr Lewis explained: “To get the full state pension, you need 35ish – and it really is an ‘ish’, it can vary widely – qualifying National Insurance (NI) years.
“These usually come from working, looking after children, or via some benefits. Yet many are missing past NI years, commonly due to years abroad, low incomes, career breaks or not claiming credits.”
People can find out if this will benefit them by checking their National Insurance record.
Mr Lewis noted that the years “only count” towards a person’s state pension if it says ‘full year’. He added: “Even missing a week of credits can mean you get nothing for that year.”
People should then check if they can plug some of these gaps – if they have them – for free.
For example, checking if Child Benefit was claimed and/or by the right partner; grandparents may be able to claim child credits for providing childcare; or people could find they’ve been entitled to carer’s credits.
People should then work out if it’s worth buying the extra years, and they can use a state pension forecast to help.
For those approaching state pension age (currently 66), it could be beneficial, whereas those aged under 45, or between 45 and 60, may find they may naturally fill in the missing gaps if they’re still in work.
According to Mr Lewis, “the most” people will have to pay for the old years collectively is £824. However, this figure can increase a person’s overall state pension by thousands.
Most people can apply for these online, but some people can only do it by phone.
These include:
- People at state pension age or within four months and eight days of it
- People filling gaps from self-employment or when they worked abroad
- People who hold a ‘Married Women’s Reduced Rate Election’ certificate
- People eligible for ‘Home Responsibilities Protection’
Customers should then contact HMRC using the details on this page, which vary based on enquiry.
Martin Lewis is the Founder and Chair of MoneySavingExpert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip.
