Money expert Martin Lewis has shared a relatively unknown hack to help people boost their State Pension.
The Money Saving Expert has urged those aged between 45 and 70 to check if they are missing any National Insurance (NI) contributions from their State Pension. If they are missing NI contributions, then a voluntary £800 should be added for each year left out.
The new State Pension is £185.15 a week, usually paid every four weeks, but this amount could increase if you choose to defer.
The new State Pension introduced in 2016 is based on your National Insurance record when you reach the eligible age – you will need 35 qualifying years on this record to get the full amount, though you may be able to top this up with voluntary contributions if you fall short.
You can check how many years of NI payments you’ve made and see any missing years on the government website.
Until April 5, 2023, workers looking to top up their payments can go back as far as 16 years, which is particularly useful for those near state pension age.
But after this date, you will only be able to go back six years.
A state Pension forecast of how much they are likely to get based on their National Insurance record will be shown as well as any outstanding contribution.
Speaking on the Martin Lewis Podcast, the expert said: “A voluntary national insurance year costs around £800 – but it adds £275 a year to your state pension, which means if you live just three years after state pension age or if you are already at state pension age, after buying the extra year then you’re even.
“A man who gets to age 66 will typically live 19 more years. So each £800, in that case, would get him £5,300 back. And that’s before the fact that it’s normally linked with inflation (obviously, that’s another discussion at the moment for another day).
“For a woman, because women live longer, for 21 more years at the same age, each £800 would be worth £5,800 extra.”
He said: “You can buy more years and this is the crucial bit and why timing is so important right now. Until April 2023 you can buy back national insurance years dating all the way back to 2006.
“After April 2023 you’ll only be able to go back six years. So as you can see there is a substantial number of years if you’re missing them you only have a short window left to buy them.”
You can also call the Future Pension Centre helpline on 0800 731 0175 for more information on your Sate Pension or to ask for a forecast.