Martin Lewis has warned there are potentially millions of people who could boost their income in retirement by filling gaps in their National Insurance record.
While paying voluntary National Insurance contributions will not be right for everyone, it could “massively boost” what a person gets in later life.
Speaking on the BBC’s The Martin Lewis Podcast last week, the financial journalist said people aged between 45 and 72 visit check to see if they’re forecast to get the full state pension by getting a state pension forecast on Gov.uk.
If a person is not due to get the full state pension, Mr Lewis suggests they then check whether they have a shortfall in National Insurance years.
Filling in gaps in one's National Insurance record can mean a person gets a greater state pension
The Money Saving Expert founder explained: “Typically you’ll need 35 years to get the full [new] state pension, but that is a big ‘Ish’ – because in some cases you might need 43 years to get the full state pension. It is not a set figure at 35.”
Mr Lewis suggested people first look at whether they are due a shortfall in the full state pension, and if so, if they are missing National Insurance years. People can then look at buying National Insurance years – known as making voluntary National Insurance contributions.
“Typically, for each maximum £800 you spend, if you have a typical life expectancy, you’ll gain £5,000-£6,000, inflation-linked, from doing it.
“It’s the best safe use of money most people will find.”
It’s important people first make sure they are actually likely to benefit from the contributions and also ensure they aren’t able to get National Insurance credits instead.
Mr Lewis also warned: “There are whole other checks and people you need to talk to before you actually buy the years, but I get so much feedback now from people who spent £4,000/£5,000 but they’re due to get £30,000/£40,000/£50,000 on the back of it because it boosts their pension each year into their retirement year after year by a substantial amount.”
Zoe Brett, financial planner at EQ Investors pointed out individuals may qualify for National Insurance credits.
She told GB News: “Broadly speaking, a person may have entitlement to free National Insurance credits if they have ever claimed benefits, been a low-income earner or carer.”