Martin Lewis has urged Britons to urgently considering buying back missing National Insurance years to ensure they have the maximum state pension available.
He says anyone aged over 40 should investigate finding the cash to buy back any missing years of contributions before a deadline passes in April next year.
It costs around £800 for each year of missing NI contributions which will add £330 a year to your pension, so – effectively – this investment pays for itself in less than three years.
A man who typically lives to 85 would get back £5,400 while a woman with a typical life expectancy of 87 would collect £6,100. However, these figures soon multiply when someone buys back multiple years of mission pension.
The money saving expert said a couple who both pay back any missing years of NI contributions might – in theory – benefit to the tune of almost £80,000. This was based on a couple who paid £4,000 each to buy back missing years and then both lived long enough to collect the state pension for 20 years.
Step 1
Step 2: Check whether you’re missing any NI years since 2006
This shows your full national insurance record. And for each year since you were 16, it will either say ‘Full year’ or ‘Year is not full’. The ‘View details’ link will give you more information.
Secondly check your pensions forecast, which can be done via this government portal – https://www.gov.uk/check-state-pension
This will give you two pieces of information:
How much state pension you’d get based on your NI record to date.
A forecast of how much state pension you’re likely to get if you work up to your state pension age.
If your forecast isn’t for the full pension – currently £221.20 a week – and you have gaps in your NI record, you may be able to boost years to get to the full amount.
There’s a link in your forecast to do this.
Step 3: If you have gaps in your record, see if you can plug then for FREE with NI credits
It’s not only work that earns you NI years. A range of scenarios see you build up NI entitlement automatically.
These include:
Caring for a child in the family: As long as you are/were between 16 and state pension age. If it is your child, only one parent can claim the credits via Child Benefit, but you can transfer the credit from one parent to the other.
You are/were on it and not earning enough for a qualifying year.
Unemployed and actively looking for work: You needn’t have been claiming jobseeker’s allowance, but will need to prove you were looking for employment.
On Employment and Support Allowance: Eligible for it, but not claiming it.
Caring for a sick/disabled person: If it is/was for at least 20 hours a week. See our separate Carer’s Credit guide on this for more details.
On jury service: You are/were on it and aren’t/weren’t self-employed.
Wrongly imprisoned: As long as your conviction has since been quashed.
A foster carer (kinship carer in Scotland): Since 6 April 2010.
On statutory maternity, paternity or adoption pay: You are/were on it and didn’t/won’t earn enough for a qualifying NI year (additional statutory paternity pay also counts).
Spouse of a member of the armed forces: You’re married to, or are a civil partner of, a member of the armed forces and went with them on an overseas posting (additional eligibility rules apply here).
On a Government-approved training course: You are/were on one, are over 18, and weren’t sent on the course by Jobcentre Plus.
Full information on how to manually apply for any NI credits you’re due is on the Government’s national insurance credits page.
Most will have already got any NI credits they’re due. But if you haven’t, make sure you claim them and then start this process again.
Step 4: Work out if you should pay to boost your state pension
For most under the age of 40, it probably won’t make sense to pay for full NI years, but it might be worth checking if you can upgrade partial years on the cheap.
If you’ve gaps in your NI record that you’re certain you won’t make up (for example, if you’ve moved overseas), or if you’re really worried about not being on track and want some extra peace of mind, it might be worth checking if you have any partial years in your record, as these can sometimes be upgraded to full years for as little as £15 – we’ve more details below.
Step 5: Use the moneysavingexpert.com calculator to see what topping up could be worth
Most of the time a full NI year costs £824, unless:
You’re topping up the 2023/24 tax year, in which case it’s £907.40.
You’re topping up either the 2020/21 or 2021/22 tax years, in which case it’s about £20 to £30 cheaper, as you pay the original
rate for those tax years.
You’re self-employed.
You’re topping up a partial year, in which case it’ll cost less to make it a full year.
