‘Urgent’ state pension decision for Britons as deadline looms

Increasing state pension payments will be a goal for many people, who might not have the full sum. Typically hinging on National Insurance contributions, some may fall short due to a variety of reasons.

However, there is a time limited opportunity for Britons to potentially provide a substantial boost to their state pension – but they must take action. 

Express.co.uk spoke exclusively to Shona Lowe, financial planning expert at abrdn, who provided insight on what Britons may want to consider. 

She said: “There is an urgent decision that anyone aged 45 to 70 needs to make around voluntary National Insurance contributions.

“This will essentially make it easier to collect the number of full payment years to get the maximum amount of state pension at retirement age. 

“There are currently ‘transitional arrangements’ in place which mean you can pay to plug gaps in your record dating all the way back to 2006. 

“Yet this arrangement ends on July 31, after which you can only fill gaps going back six tax years. So, time is of the essence.”

At present, the cost of filling a gap for one year is currently £824.20.

The additional benefit of such an action is approximately £275 per year, which will also increase annually if the triple lock continues.

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As a result, Britons will need to claim their state pension for another three years in order to break even on the cost.

However, people should also be aware the cost will jump to £907.40 from April 6, 2023, increasing the incentive to act sooner rather than later.

Many people will have paid National Insurance for decades, but might find some of their contributions do not count.

Ms Lowe continued: “Remember that if you’ve paid some of your NI contributions, unless it’s a full year it will not count at all towards your state pension. 

“This could happen if you work abroad or were self employed for a period of time, took a career break for parenting or other caring commitments. 

“But plugging any shortfalls can be a cost-effective way to boost your state pension when the time comes to retire. Plus paying for a partial year is cheaper than buying a full year, as you’ll only pay proportionately for the weeks you’re missing.”

However, before a person pays for any voluntary contributions, the expert encouraged individuals to check their National Insurance record.

She added: “It’s a good idea to request a state pension forecast to get information on your state pension entitlement. 

“You can do this for free online using the ‘Check your state pension forecast’. 

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“This will tell you how much state pension you’ll get based on your record to date as well as how much state pension you’re likely to get if you work up to your state pension age.”

For those who have already reached the state pension age, the expert had a key tip to consider.

She said: “If you’re already at state pension age, you need to check your record which will show you any NI years since 2006 that are ‘incomplete’. If this is the case, it could be worth paying to plug these to get a higher state pension.”

People should bear in mind voluntary National Insurance contributions do not always increase a state pension.

As a result, Britons will want to contact the Future Pension Centre or the Pension Service to find out if they will benefit.

The Government also states some individuals will want to seek financial advice before deciding to make a voluntary contribution.

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