Money-saving expert Martin Lewis has issued an urgent reminder for individuals between the ages of 43 and 73 to enhance their state pension by up to £80,000. Lewis notes that there are only six months to make use of this vital scheme. This scheme enables people to buy back the missing years of National Insurance (NI), which has a profound effect on the amount you get from the state pension.
Deadline for Boosting State Pension Approaching
The clock is ticking, with a deadline fast approaching for individuals to address gaps in their National Insurance record. These gaps, often caused by factors such as low earnings, time spent outside the UK, or career breaks, could mean you don’t qualify for the full state pension. Currently, a full state pension amounts to £220.20 per week, and to achieve this, a 35-year National Insurance record is generally required.
For those with incomplete NI records, there’s a limited-time scheme that allows you to buy back up to 13 missing years. The cost is approximately £835 per year, but Lewis stresses that the potential return far outweighs this expense. If you act before the deadline, you could boost your pension by £5,400 or more per year—potentially adding up to £79,300 over your lifetime. Once the April deadline passes, you will lose the opportunity to claim these years.
In a recent tweet, Martin Lewis said:
“This is your 6-month warning! For each £825 or less you pay to buy National Insurance years, many gain £5,400+, but many closes in April. It’s the MOST LUCRATIVE thing many under age 73 can do; some gain £10,000s. The process isn’t quick, so check it now.”
How the Scheme Works
- Cost of Buying NI Years:
A full voluntary Class 3 National Insurance year typically costs between £800 and £825, while self-employed individuals can buy back years for around £160. Partial years are even cheaper. - Potential Return:
Each additional year you buy typically adds £329 per year to your pension, meaning you’d recoup the cost within about two and a half years of retirement. For example, a 66-year-old man living to average life expectancy could expect to receive £5,400, while a woman would gain £6,100.
Who Should Consider This?
Lewis goes on to add that anyone aged between 43 and 73 years of age should try to consider this opportunity. On the other hand, people younger than 43 should have enough time as they can earn the needed years of NI in the course of future work. But it is the older population who are closer to the age of retirement who are really able to purchase years of NI volunteering for them to be able to make a significant difference.
He also emphasized the importance of checking your NI record for any gaps since 2006. Missing years could potentially be inflation-proofed and add thousands to your state pension over time.
He also managed to say about the importance of paying attention to gaps in the NI record, starting in 2006. All those above the age of 50 years could still not have those years if they purchased something. This would mean that those gaps have been reached already – meaning unattached years which can be worth thousands of pounds would be of great benefit to any state pension with time.
Since it is planned to close the scheme in April, he recommends that one should move quickly because the entire process can take a great deal of time. This opportunity is one of the best opportunities from a financial standpoint for older people who are nearing the retirement age.
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