MILLIONS of households have just three months to carry out a check and claim tens of thousands of pounds.
Last month, the government gave people extra time to plug the gaps in their National Insurance record to boost their state pension.
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This was due to government phone lines being jammed with people calling to top-up their contributions and not being able to get through.
But, consumer champion Martin Lewis has warned people not to wait until the extended deadline in case it happens again.
Writing in this week’s MoneySavingExpert newsletter, Martin said: “A special deadline for people to backfill gaps from 2006 to 2016 was due to end with the last tax year on April 5.
“But so many struggled to get through to jammed government phone lines that it’s been extended till July 31.
“Yet don’t leave it till then, as there’ll likely be the same problem.
“So… if you’re 45 to 70, you should be checking ASAP if you need to do this. It’s not quick, but it can be immensely lucrative.”
People often have gaps if they were unemployed, on a low income, or self-employed.
You need 35 years’ worth of NI contributions to get the full pension amount – which is now £203.85 per week.
Households were set to have until April 5 to backdate any missing payments in the last 17 years – as far as 2006.
After this date, they would have only been able to backdate payments by up to six years.
This deadline has now been moved to July 31, 2023.
This scheme only applies to people who reached (or will reach) state pension age after April 5, 2016.
What you can do now and how much you can get
National Insurance contributions are usually taken directly from your wages if you’re employed or via self-assessment for the self-employed.
You can check how many years of NI payments you’ve made and see any missing years on the government website.
Earning back the years isn’t free so your voluntary contributions do come at a price.
The current 2022/23 rate works out to be £17.45 per missing week which means it costs £907.40 to buy one year of contributions.
As the state pension is currently £203.85 per week, this boost would add £5.82 per week or around £302.86 per year – or £6,057 over a 20-year retirement.
Someone with 10 missing years could pay out a little over £9,000 to fix the gaps but see a boost of £60,000 (before tax) in state pension over a typical 20-year retirement.
But of course, there are risks – if you happened to die before the three years are up then you will have wasted the money, the savings experts explained.
It’s important to note that before making voluntary contributions, you need to get a pension forecast and speak to the Government’s Future Pension Centre.
The body will be able to tell you whether it’s worth you paying for extra qualifying years, as it may not be beneficial for everyone.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk
