You have until the end of April to make a simple change which could boost your income
A BBC finance expert says Brits have a two-month window to make a quick switch which could net them an annual £329 boost for life once they hit state pension age. Chatting on BBC Morning Live, money guru Laura Pomfret urged people to check if you are eligible – and those who bump up their contributions by just four years could rake in £28k more.
You need 35 years’ worth of National Insurance contributions to enjoy the full new state pension, with 10 years the minimum amount required. Brits have until the end of April to top up any incomplete years.
But post-deadline, you will only be allowed to top up the previous six years. Ms Pomfret explained: “The UK state pension that we receive is determined by our national insurance record, and you need 35 years of contributions to be able to qualify to get the full state pension. You’d need a minimum of 10 to qualify for any and then between then you get differing amounts.
“Right now you have a one time chance to pay gaps going all the way back to 2006. Now typically you can only go back six years, but for now until April 5th, which is two months today, we have this opportunity to top up all the way back to 2006, which shows why it can potentially lead to thousands.” reports Lancs Live.
“This deadline has been extended twice last year by the government. And you have until April 5th to do so.”
Ms Pomfret explained that National Insurance is typically paid directly through salaries. She said topping up a year would ‘typically cost about £824’. She added: “It’s a little more in recent years but going back to 2006, it’s frozen, it’s at around £824.
“So for £824, that would give you £329 extra annual income every year of your pension. So you can see just by paying in £824, you get that paid back within 2.5 years of receiving the state pension, and over a typical 20-year retirement, you can make £5,750 pounds back.”
She gave an example of someone who discovers they have an employment gap of between 2014 and 2019. To fill that gap, they would have to pay in £4,120 pounds. Laura said: “It sounds like a lot of money, but that means per year she would receive an extra £1,645 pounds. So same as the last calculation, she makes her money back in 2.5 years, but over 20 year retirement for just over £4,000 pounds, it’s over £28,000 pounds that she would receive.”
A tool by HMRC and the Department for Work and Pensions (DWP) allows individuals to check if they can increase their state pension payments by making voluntary national insurance contributions. This tool enables you to purchase National Insurance years online to fill any gaps in your record.
Currently, you have the option to buy missing National Insurance years dating back to 2006, with a top-up for a missed qualifying year setting you back £824. But come April 2025, this will alter as the look-back period will be cut down to six years.
You can check your National Insurance payments record here.
