State pension: How to find out if you can top up National Insurance contributions
A person topping up their National Insurance contributions can increase their state pension payments significantly over the course of their retirement.
People can usually voluntarily top up their National Insurance contributions as far back as six years ago. But people can currently pay contributions as far back as 2006 but only until the end of the tax year.
A person can find out how much state pension they are on track to receive using the state pension forecast tool on the Government website.
An individual will need to create a Government Gateway account to use the service. The tool will show when a person can claim their state pension and how much they will get.
It will also show them if they can increase their pension by paying voluntary contributions and if they can get any other Government support, depending on their circumstances.
The current state pension age is 66 for both men and women with plans for this to increase to 67 and then 68 over the coming years.
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The full basic state pension currently pays £141.85 a week and a person typically needs 30 years of contributions to claim this.
A person usually needs 35 years of contributions to get the full new state pension, which is £185.15 a week.
State pension payments are increasing by 10.1 percent in April with the full basic state pension going up to £156.20 a week while the full new state pension will increase to £203.85 a week.
A couple appeared on a recent episode of Martin Lewis’ ITV show after they paid in just under £1,000 and are now on course to receive an extra £11,500 in payments.
Mr Lewis encourages people aged 45 to 70 to check if they can top up their state pension and boost their payments.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, urged people to consider buying credits to plug gaps in their record if they can afford the expense.
She explained: “A full year costs around £800 and for each year bought you get 1/35th of a year’s state pension – around £275.
“This means you effectively earn your money back in around three years so it can prove very good value.”
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Ms Morrissey said figures from the DWP released last month show state pension incomes are continuing to increase.
She explained: “The average amount of new state pension claimed by women is £170.52 compared to just £152.12 for a woman claiming the basic state pension – it is an enormous gap that makes a huge difference to women’s retirement prospects.
“It has also allowed women to significantly close the gender gap, although this isn’t all good news, because the increase for women has been accompanied by a cut for men – who claim an average of £175.84 in new state pension per week compared to £178.60 under the basic system.
“The playing field is levelling off though it’s important to add that not everyone gets a full state pension and there are still 1.8 million people receiving less than £100 per week.”
She also encouraged state pensioners to check if they can claim Pension Credit as there were 44,000 fewer claimants compared to the same time last year.
The benefit tops up the incomes of people on low incomes and is thought to be one of the most under claimed benefits.
Pension Credit tops up a single person’s weekly income to £182.60 a week and up to £278.70 a week for couples.
The benefit is also increasing by 10.1 percent in April, along with many other benefits including Universal Credit and Carer’s Allowance.
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