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Britons can usually voluntarily pay National Insurance contributions to cover any gaps in their record as far back as six years. For a limited time, this has been extended back another 10 years, to 2006, but this extra window closes in a matter of weeks.
Zoe Brett, Senior Technical Consultant at EQ Investors, warned Britons the “window is closing” on the opportunity for Britons to max out their state pension.
Speaking exclusively to Express.co.uk, she said: ”Currently you can fill National Insurance (NI) gaps going back to 2006.
“However, from April 5, this will change. After that date, you will only be able to plug six years’ worth of missed NI contributions.”
She said people may want to consider filling any gaps in their record as rising prices are particularly felt by retirees.
She explained: “Working-aged people can typically expect pay increases each year or bonuses, however, retirees on fixed incomes have far less control over fluctuations in income demands and instead may need to look for ways to reduce their cost of living.”
The pensions expert said an inflation-proofed source of income such as the state pension is “worth its weight in gold”.
Ms Brett said: “The full state pension is currently £185.15 per week and is proposed to rise to £203.85 from April 2023.
“To qualify for the full state pension, you must have paid National Insurance Contributions (NICs) or received NICs credits for 35 years.
“The Government recognises that some individuals may have gaps in their NICs record for a variety of reasons.
“As such, they provide the opportunity to purchase additional years to ensure an individual can obtain the full state pension at state pension age.”
State pension payments are increasing by 10.1 percent in April as the triple lock policy has been reinstated.
The policy guarantees the state pension increases each year in line with the highest of 2.5 percent, the rise in average earnings or inflation.
A person typically needs 30 years of NI contributions to get the full basic state pension, available for men born before April 6, 1951, and women born before April 6, 1953.
The full basic state pension is currently £141.85 a week and is increasing to £156.20 a week from April.
Ms Brett explained the process for a person to check if they have any gaps in their NI record and how they can pay contributions.
She said: “The first step is to assess if there are any gaps in your NICs record. To do this you need to obtain a state pension forecast online from www.gov.uk/check-state-pension.
“This will confirm if you have already accrued entitlement to the full state pension or are likely to do so by state pension age.
“If you do not have full state pension entitlement, then you need to check your NICs record for ‘incomplete’ years. You will find a link to your NICs record on the state pension forecast statement.”
Once a person knows how much their state pension entitlement looks set to be, they can consider the value of maximising it.
Ms Brett said: “The current cost of purchasing extra state pension is £824 per £275 of annual state pension income.
“Considering average life expectancy of 86, the state pension may be payable for 19 years. Your purchase of £275 additional pension for £824 could therefore provide you £6,682 of income over your lifetime assuming average life expectancy and inflation of two percent.”
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