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, reports The Independent. If they are missing NI contributions, then a voluntary £800 should be added for each year left out.
Gaps in your contributions can be due to transitional arrangements that were put in place for a new State Pension, introduced in 2016. Martin has warned people to contribute quickly as they will be limited from April this year.
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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.”
Martin also told listeners who have yet to reach retirement age to check their State Pension summary on the Government website. People can find out when they can view a forecast of how much they are likely to get based on their National Insurance record.
For those who have already reached State Pension age, the financial guru told them to check their NI record which will inform people how many years of full contributions they have - and if they can top up any missing years they have.
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.”
For more information, Martin has a Money Saving Expert website with a team dedicated to helping those with any issues.
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