Kwarteng says UK ‘committed’ to helping pensioners
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How much someone can claim through their state pension is dependent on their National Insurance record. Some 35 years of National Insurance contributions are needed to claim the full new state pension, which is £181.15 per week. However, it is possible to fill in historic “gaping holes” in one’s National Insurance record thanks to a Government scheme – but the deadline is fast approaching.
Usually, those thinking about retirement are able to fill gaps in their National Insurance record up to six years after the year in question under normal rules.
After that point, the year becomes a permanent gap in someone’s National Insurance record which could impact their ability to get the full state pension.
Despite this, a recent Government scheme allows people to fill in gaps in their National Insurance record from further back.
As a result, this means that 2016/17 would normally be the oldest year which could be filled in 2022/23.
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Until April 5, 2023, Britons are able to go much further back in their record and fill gaps for any year from 2006/07 onwards.
This is an extra ten years which means people have a better chance to “boost” their state pension payments.
It should be noted this offering only affects those who come under the new state pension system.
Anyone who wants to receive this boost should be aware they only have six months until the scheme’s final deadline.
As it stands, the cost of voluntary Class 3 National Insurance contributions is £15.85 per week or £824.20 per year.
This can add up to 1/35 of the full rate of someone’s eventual state pension which equates to a boost of £5.29 per week or around £275 per year.
Steve Webb, a partner at LCP and former pensions minister, shared how those approaching retirement can boost their state pension payments by using this method.
Mr Webb explained: “For many people, paying voluntary National Insurance contributions can be great value for money and can help them boost their state pension in a cost-effective way.
“For people with gaps in their National Insurance record going back more than six years, the window to fill those gaps will soon close.
“Some people have gaping holes in their NI record and this will be the last chance to fill them.
“Although topping up is not the right answer for everyone, and people should always check with DWP before handing over any money, for some people this could be by far the best rate of return they could get on any spare capital.
“Missing out could cost some workers thousands of pounds.”
Becky O’Connor, the head of Pensions and Savings at interactive investor, added: “Millions of people do not receive the full amount of state pension, perhaps because of gaps in their working lives where they did not benefit from National Insurance credits.
“You need at least 35 qualifying years to be eligible for the full state pension.
“During this time of rising energy prices, which are disproportionately affecting pensioners who are largely dependent on the state pension, it’s important to remember that it’s normal for retirees to receive less than the full amount.
“This is especially true for women, who were more likely to take gaps from work when they were younger and therefore tend to have had fewer qualifying years under their belts.”
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