Everyone born after a certain date can add as much as £70,200 to their state pension, Martin Lewis has urged.
Time is rapidly running out to sort out and buy back 13 missing National Insurance years on your record.
The record, held by the government, determines whether you’re entitled to a full state pension or not, and so can be very lucrative if it’s maxed out.
You need roughly 35 years on your National Insurance record in order to get the full state pension, but there are ‘transitional arrangements’ in place for a limited time allowing people to buy back 13 missing years in your records.
For a limited time, the government is allowing people to buy back 13 missing years in your tax records all the way back to 2006 but at the end of this tax year, the deadline will pass and you will never be able to buy them again.
If you buy a missing National Insurance year in your record for £824, it can be worth £5,000 gain per full year you buy back in your pension, or £5,500 for a woman, if either live to typical life expectancy, Martin Lewis said.
Money Saving Expert founder Martin Lewis is urging people to check and make a claim as soon as possible.
The new state pension was introduced in 2016 and applies to all men born after April 5, 1951 and women born after April 5, 1953.
So if you were born after those dates, you may be eligible to claim extra National Insurance years.
You need to spend a little bit of money to “buy back” any years missing from your record. They could be missing due to going abroad, not earning enough to qualify in a certain year (for example, losing your job or taking maternity leave) or various other reasons.
You can buy back missed years as far back as 2006, but this is due to end before April 2025.
That sounds like a long time but the process isn’t quick and you may need to save up to buy the years back.
Each year costs £824 maximum to claim back. From 2006, it was £824.20 for a full year, then £795.60 from 2020-21 and £824.20 again in 2022-23.
Martin Lewis said on his ITV Martin Lewis Money Show: “Your break even point is less than three years. You pay £800, and you get £300 a year, after three years you have £900 back plus inflation and in fact if we get to it the life expectancy for a man who’s aged 65 is 85, so if you live that long that would be a £5,000 gain per full year that you buy. For a woman it would be a £5,500 gain, they tend to live a couple years longer.”
Adding £5,500 to your state pension per year would be £71,500 for 13 full years being bought back.
Martin added: “This is a clarion call to the nation but this is not a call to do without checking.
“Call the Pension Centre and check if buying NI years will boost your pension because it is complicated.
“If it’s pre-2006 years, you can’t buy them, don’t call, and if you’re already getting a full state pension you can’t boost it.”
Martin heard from one man who bought back six missing National Insurance years, costing him £4,893. But his pension will go up by £1,650 a year as a result, which means if he lives to the average male life expectancy, he will make a profit of £26,465 extra in his state pension pot.
