Martin Lewis has shared guidance on how people from across the UK can increase their state pension by thousands of pounds.
The Department for Work and Pensions (DWP) states that people ordinarily must have 10 qualifying years on their National Insurance record in order to get any new State Pension — and 35 years' of contributions to qualify for the full amount.
Lewis said that people across the UK are unaware that they do not possess enough qualifying years to receive the maximum retirement income from the UK Government.
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Therefore, it is crucial to make sure and take action if a pension shortfall is discovered.
As reported by Birmingham Live, the full new State Pension is currently £179.60 a week, totalling £718.40 per month or £9,339.20 per year.
Starting from April, this will increase to £185.15 per week, or £740.60 a month and £9,627.80 per year.
The rise won't be as much as expected after the DWP changed the rules, meaning the triple lock policy that usually determines the increase was suspended for a year.
According to Lewis, people ordinarily accumulate qualifying years of NI contributions through working — so long as they are in employment and making more than £184 per week from a single employer, or are self-employed.
People who are unable to work due to illness or disability, or because they are a carer or unemployed can instead receive National Insurance — which count towards their State Pension.
Speaking on The Martin Lewis Money Show, Lewis said: "The more of these (credits) you have, the bigger your State Pension gets up towards a maximum, and many people are missing out. If you max your State Pension it could be worth thousands of pounds extra to you.
"If you're a carer for someone who’s on a benefit, for over 20 hours a week, you can be entitled to Carer's Credit, and if it's over 35 hours a week you might be entitled to £67 a week Carer’s Allowance.
"If you're a nonworking parent married to somebody who earns over £60,000, so you don't get Child Benefit, claim anyway. It's that claim that starts to trigger your National Insurance credits."
More than four million people missed out on qualifying for State Pension contributions in the tax year 2018-2019, according to Government figures reported by The Sun.
There are several types of National Insurance contributions and credits. These are as follows:
- Class 1 - For employees earning more than £184 a week and under State Pension age - these are automatically deducted by your employer
- Class 1A or 1B - Employers pay these directly on their employee’s expenses or benefits
- Class 2 - for self-employed people earning profits of £6,515 or more a year. If you’re earning less than this, you can choose to pay voluntary contributions to fill or avoid gaps in your National Insurance record
- Class 3 - Voluntary contributions which you can pay to fill or avoid gaps in your National Insurance record
- Class 4 - For self-employed people earning profits of £9,569 or more a year
Universal Credit claimants get Class 3 credits automatically. Those claiming Working Tax Credit may get either Class 1 or 3 credits depending on their circumstances.
Individuals who are unemployed and claiming Jobseeker's Allowance (and not in education or working 16 hours or more a week) get Class 1 credits.
Anyone who is out of work but not on JSA should ask their jobcentre about getting Class 1 credits.
Those on Employment and Support Allowance (ESA) will get Class 1 credits.
And people on Statutory Sick Pay can apply for Class 1 credits.
People claiming Maternity Allowance and Carer's Allowance get Class 1 credits automatically.
Anyone on Income Support who is providing "regular and substantial care" gets Class 3 credits automatically.
Family members who care for a child under 12 (usually while the parent or main carer is working) can apply for Specified Adult Childcare credits towards their National Insurance record so they get a State Pension.
Check how much State Pension you are in line to receive using the Government's online pension checker.
You can then apply for a National Insurance statement from HM Revenue and Customs (HMRC) to check if your record has gaps.
If you have gaps in your National Insurance record that would prevent you from getting the full new State Pension, you may be able to:
From April 6, 2022 to April 5, 2023 National Insurance contributions will increase by 1.25 per cent. This will be spent on the NHS and social care in the UK, as was announced by Boris Johnson in September 2021.
