A Week Left To Get A Better Pension

There is less than a week left to claim a better pension.

You have until 5th April to fill any missing years of National Insurance contributions for the years 2006 to 2018, which could boost your pension by up to £50,000.

Q: How would you get a better pension?

National Insurance is a payment you make each year. You need to have made 35 years of contributions to be able to claim the full state pension at 66 or 67. The full pension is worth £221.20 a week which is about £11,500 a year.

There are exemptions to the 35 year rule - so take that more as a general guide than a fixed law.

But many people have missed some years of NI payments. That might be because they were unemployed, working abroad abroad, look after ill relatives or any number of other reasons.

Because of those missing years of NI contributions, they won't get the full state pension.

The good news is that you may be able buy back missing years now and qualify for the full state pension for the rest of your life.

You can buy up to 19 years of missing NI.

Q: Why the rush?

The new state pension was a new scheme and the government put into place some transitional arrangements which allowed people to buy back past years as the schemes swapped over.

If you were born before 5th April 1952 (men) or 5th April 1953 (women) you are on the old state pension and this doesn't apply to you.

The transitional window was due to close in July 2023 but so many people were trying to claim back lost years - the system couldn't cope and so they extended the deadline.

The new deadline is 5th April 2025.

Q: How do I check if I am missing NI years?

Who has the time/inclination to remember how many NI years they ahev logged. So here is an easy way to check.

Go to the NI checker by clicking here

Like almost all government websites - it's not super easy to use and you need a government gateway User ID. To get that you need your NI number, a passport or similar ID and an email. It's a bit of a faff. But once you have it, oyu cna use it for all government websites.

Once you are though, you get a year-by-year summarr of what contributions you have made each year. Then unehlpfully you have to count the number of years yourself - it doesn't add them up for you. But having said that, it is one of the easier sites to use from the range of official ones - and I'd recommend everyone checks it anyway.

Q: Is there a way of checking how much pensions I will get?

Yes, there is a different government website which is a State Pension Forecaster, which you can get by clicking here

That should immediately tell you how much pension you get. Surprisingly easy, once you have set-up your government log-in details.

Q: How much does it cost to buy a year of national insurance contributions contributions?

Most of the time the rule of thumb is that the answer is £824/year. But it can vary depending on a couple of factors including on whether you were self-employed and it is important to get advice before making a decision.

Q: Is it always worth buying any missed years?

No.

The answer varies and in many cases the decision won't be straight forward. But for many people it can be very profitable indeed.,

If you are close to State Pension Age (As things stand now, men and women's state pension age is 66 and between 2026 and 2028 it will rise to 67) it might be relatively easy to check whether the extra cost is worth it. You'd be working out how much you pay now to get how many years of extra benefit.

If you are younger, it might be that you would naturally fill the missing years with extra work based NI - so there might not be a need to actually buy extra years now.

To work out whether it is right for you - take the cost of the extra years and see what additional payment that would add to your pension. Then you can tell how many years you would have to claim the extra pension to pay back the extra cost.

There is another way of getting extra cash without buying the missing years.

If you're on a low income then you might get a Pension Credit top-up. So you could get the same amount of cash with Pension Credit without paying for the missing years.

Q: How to pay for the missing years?

I would suggest you do nothing without taking advice. You can call HMRC on the helpline

0300 200 3500

Bring a good book (long) or start kniitting a very long scarf. The helpline is rubbish and there are loads of stories about being on hold for ages.

Alternatively you can pay online (remember I would suggest you take advice first)

by Clicking Here

Listen to Money Matters on Times Radio with me, Fi Glover and Jane Garvey at 3:45pm on Mondays.

For more commentary follow me on Twitter/X and BlueSkySocial @adamshawbiz

Please remember everything on this site is journalist commentary and is not financial advice or guidance in anyway.

If you want to contact me - send an email via here