Words by Tommaso Dimiddio, ITV News Producer
People in Britain aged between 40 and 73 have until April to potentially boost their state pension by thousands of pounds.
They can do so by checking their National Insurance (NI) records and filling in any gaps going back as far as April 2006.
This will increase their chances of banking enough years of NI payments to qualify for a full state pension when they retire.
Why does the number of National Insurance years matter?
Consumer expert Martin Lewis says National Insurance is a bit like a token you can earn for each tax year.
The more tokens you get, the bigger the proportion of the weekly state pension you receive once you hit retirement age. The state pension currently stands at £221.20 per week.
To qualify for a “token” in any given tax year, you have to have sufficient National Insurance credit for that year.
You need at least ten qualifying NI years to get some state pension.
To get the full state pension, you need around 35 qualifying NI years.
Why might someone of working age have gaps in their National Insurance payments?
National Insurance is not paid if someone is:
- employed but does not earn above a certain threshold
- unemployed and not claiming benefits
- self-employed but does not qualify for contributions because of low profits
- living or working outside the UK
When is the deadline?
The deadline of April 5 has been set for people to check their national insurance (NI) records and fill in any gaps going back as far as April 2006.
From April 6, people will generally only be able to make voluntary NI contributions for the previous six tax years, in line with normal time limits.
However, the Government has said that those who cannot get through ahead of the deadline can use an online call back request form.
The form has been placed on the gov.uk website, for those who are struggling to contact the Department for Work and Pensions (DWP) by phone to pay voluntary NI contributions.
The DWP will then contact the person on the phone number given to discuss payment.
How to check if making a voluntary contribution will benefit you?
You should check your National Insurance record to find out how much it will cost to pay voluntary contributions and if you’ll benefit from paying voluntary contributions.
Voluntary contributions do not always increase your state pension, for example if you were contracted out.
If you’re below state pension age, check your State Pension Forecast to find out if you’ll benefit from paying voluntary contributions.
If you’ve reached state pension age, contact the Pension Service to find out if you’ll benefit from voluntary contributions.
Why you might want to pay voluntary contributions:
- you’re close to State Pension age and do not have enough qualifying years to get or increase your State Pension
- you know you will not be able to get the qualifying years you need to get the full State Pension during your working life
- you’re self-employed and have annual profits of less than £6,725
- you live outside the UK, but you want to qualify for certain benefits or the State Pension
- you’re not eligible for National Insurance credits
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