Martin Lewis, the founder of MoneySavingExpert, has urged anyone under the age of 73 to invest £825 to potentially boost their state pension by £5,400. In the latest MoneySavingExpert newsletter, Lewis emphasized the urgency of this action, stating, “This is your 6-month warning! For each £825 or less you pay to buy National Insurance years, many gain £5,400+, but much of this closes in April.”
The financial expert highlighted that the process can take time, so it’s crucial to act quickly. He shared a success story from a reader named Cheryl, who said, “Thank you so much for making the nation aware of the National Insurance buyback.
I’d been unaware my 36 years didn’t entitle me to a full state pension (some had been contracted out). I’ve now paid for 7 extra years, which will gain me £40,000 – £50,000 depending on lifespan.”
Lewis reminded readers of the key deadlines and changes in the state pension system. The ‘new’ State Pension was introduced in 2016 for all men born after 5 April 1951 and women born after 5 April 1953.
To receive the full amount, one needs around 35 qualifying National Insurance years, which can be earned through work, caring responsibilities, or certain benefits. “Transitional arrangements from 2016 allowed people to buy back years to 2006, instead of the usual six years. These were extended twice due to heavy demand, with phone lines jammed,” Lewis explained.
“The last extension until April 2025 was to give time for an online system to be built for everyone – yet now that’s not happening. Some can do it online, but HM Revenue and Customs admits its online tool won’t work for all.”
For those considering this investment, the advice is clear: act now to secure a significant boost to your state pension. Visit MoneySavingExpert.com or consult HM Revenue and Customs directly for more information.
State pensioners born before certain years could get a much-needed £2,991 boost to their state pension.
pension boost deadline approaching
The system was changed in 2016, with the basic state pension paying £169.50 to those who retired before 2016 (men born before April 6, 1951, and women born before April 6, 1953).
The new system pays much more – £221.20 per week, or £11,502 per year. While older pensioners cannot transfer from the old basic to the new system, they can top up their weekly income using Pension Credit. Pension Credit tops up income to £218 a week, meaning a top-up of £2,522 per year for those on the older basic state pension with a weekly income lower than that.
Additionally, claimants would get a £300 winter payment, a free TV Licence worth £169.50, and potentially council tax discounts or housing benefit depending on their local authority. To claim, call the Pension Credit hotline on 0800 99 1234. Savers have less than six months to fill in gaps in their National Insurance contributions to maximize their state pension, HMRC has warned.
The scheme allows people who have missed years of contributions to make voluntary payments backdated up to six tax years. However, time is running out for those with gaps between April 6, 2006, and April 5, 2018, as they must make the necessary contributions before April 5, 2025. Pensions minister Emma Reynolds said, “We want pensioners of today and tomorrow to enjoy the dignity and support they deserve in retirement.
That’s why I urge everyone to check if they could benefit by filling gaps before the deadline passes.”
The average payment made so far using the online tool is £1,193, with the largest weekly pension increase gained reaching £107. The state pension is set to rise to nearly £12,000 next year thanks to the triple lock guarantee, which ensures that each year the payment rises in line with either inflation, average earnings growth, or 2.5%, whichever is highest. Reynolds concluded, “It’s crucial for savers to act now to ensure they don’t miss out on this opportunity to enhance their retirement income.”
