Pension Credit – Could you or someone you know be eligible?
Martin Lewis is urging people not to miss out on the opportunity to boost their current or future State Pension payments by tens of thousands of pounds before a crucial deadline this weekend. The financial guru co-hosted Good Morning Britain (GMB) on Tuesday with Susanna Reid and shared simple ways people across the country can save money on Council Tax and energy bills to beat the April price hikes.
The consumer champion also shared a quick checklist everyone between 40 and 73 can use to see if they can increase their State Pension by up to £6,000. He warned that people with missing National Insurance (NI) Contributions only have until April 5 to buy those missing years going back as far as 2006, from April 6 you will only be able to plug missing NI years going back to 2019.
Martin told viewers: “If you’ve got at least 10 years, you will get some State Pension, to get the full State Pension, you need around 35 years. If you get the full State Pension you currently get £221.20 per week, but from next week it’s going up to £230.25 per week.”
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Martin explained qualifying years usually come from employment, looking after children and claiming Child Benefit, or through some benefits from the Department for Work and Pensions (DWP). But he warned that “many are missing past NI years, commonly due to years abroad, low incomes, career breaks or not claiming credits”.
He continued: “One year usually adds £330 a year to your State Pension and it’s protected by the Triple Lock, it’s inflation proof, so if you live 20 years (typical life expectancy), that’s a £6,000 annual gain.”
Martin urged people to go online and check their State Pension and NI years to see if they can boost their retirement payments.
It’s important to be aware this can only help boost payments for those who reached State Pension age after April 2016 who are not in receipt of the full weekly rate of the New State Pension of £221.20, or those under the current State Pension age of 66.
Below are the two crucial checks everyone should complete, which don’t take long, and could identify possible gaps in your State Pension.
Check 1: Check your NI record
Martin explained how missing NI years, or partial years, can bring State Pension payments down. A quick check on GOV.UK will identify any missing years – you can do that here.
Check 2: Check your State Pension forecast
You can check your State Pension entitlement on the ‘Check your State Pension forecast’ page on the GOV.UK website here.
This will also tell you your State Pension age – when you can officially retire and start collecting payments.
If you do these two checks and are on track for the full, New State Pension, you don’t need to do anything more. If you do have missing years, now you can check if there are ways to boost it for free.
The three main ways to boost State Pension for free are:
- Child Benefit – check for missing NI credit.
- Grandparents providing childcare – Martin explained that if a family member looked after a child under-12 at any time since 2011, before they were State Pension age (even if they are now) as parents/guardians were working, then the parent can apply to transfer their child care credit to the family member.
- Carer’s Credit – this is a free NI credit for those aged 16 to State Pension age who provide unpaid care.
Buying missing NI years
If you can spare the cash, you can plug gaps in your NI record by buying voluntary class 3 NI contributions. Buying a full extra year costs around £825 or less, though partial years will be cheaper – as little as £16.
For each year bought you get 1/35th of a year’s State Pension – around £329. This means you effectively earn your money back in around three years, so it can prove very good value.
It is, however, really important to check that it is worth your while paying for these credits so always check with DWP before doing so.
Find out more about plugging gaps in your National Insurance record on GOV.UK here.
Get advice before making a decision
Calculating whether to top up can be confusing and ultimately there is no point paying for more years than you need because you won’t get that money back.
The best solution is to call the UK Government’s Future Pension Centre on 0800 731 0175 to double check how many years you can buy and whether voluntary contributions will add to your State Pension.
Those who have already reached retirement age must contact the Pension Service on 0800 731 0469.
