How to boost your state pension by up to £250 a year
IF you’re worried you won’t have enough to live off in retirement there is a way to boost your state pension by up to an extra £250 a year.
You can do this by buying extra national insurance credits, which are needed to qualify for the state pension.
And this could be particularly helpful for women born in the 1950s who’ve just had a bid to lower their state pension age rejected by the high court.
But it’s complicated, so here’s what you need to know.
How do I qualify for the state pension?
Under the current new state pension, the most you can get is £168.60 a week (£8,767.20 a year).
How can I check my retirement age?
IF your pension is something that is on your mind, then you might be wondering what age you can retire.
Firstly, use the to check your state pension age.
Next check retirement ages on workplace pension schemes – Aviva says this can massively impact your windfall once you enter your golden years.
For advice, you can contact for free online or on 0800 011 3797.
To qualify for the new state pension you need at least ten years’ worth of national insurance contributions, and to get the maximum you need at least 35 qualifying national insurance years.
Under the basic state pension, which is for men born before April 6 1951 and women born before April 6 1953, the most you can get is £129.20 a week (£6,781.40 a year).
To get the full amount, you need at least 30 qualifying years of national insurance contributions.
Those with qualifying national insurance years made before and after April 6, 2016 come under separate rules that take into account both the old and new style state pensions.
How can I boost my state pension?
National insurance contributions are usually taken directly from your wages if you’re employed or via self-assessment for the self-employed.
People often have gaps if they were unemployed, on a low income, or self-employed.
But if you don’t have enough national insurance contributions to get the full state pension, or even any state pension at all, then you can choose to buy extra credits.
Most people will do this by buying what’s known as class 3 national insurance credits to fill gaps in their pre- April 6, 2016 record at a cost of £15 a week for the 2019/20 financial year.
So get a whole year’s worth, and you’d pay £780.
This may sound like a lot, but it would boost your state pension by 1/30 – the equivalent of £4.30 a week or £223.60 each year.
Top tips to boost your pension pot
DON'T know where to start? Here are some tips from Aviva on how to get going.
- Understand where you start: Before you consider your plans for tomorrow, you’ll need to understand where you stand today. Look into your current pension savings and policy and research when you’ll be eligible for the state pension, and how much support you’ll receive.
- Take advantage of your workplace pension: All employers are legally required to provide a workplace pension. If you save, your employer will usually have to contribute too.
- Track down your pensions: If you’ve moved jobs a lot, this means you’ll have several pension pots. It can be hard to keep track of them all, but the government offers to help you.
- Take advantage of online planning tools: and have tools that give you an idea of what your retirement income will be, based on how much you’re saving.
- Find out if your workplace offers advice: Many employers offer sessions with financial advisers to help you plan for your future retirement.
For those with gaps in their record on or after April 6, 2016, you can add 1/35 to your state pension for life.
In today’s terms, you’d pay the same £15 a week (£780 a year) but you’d get a bigger £4.82 a week or £250.64 a year boost to your state pension.
This means it would take less than four years of getting more from the state pension to recoup the cash you’d have to shell out for contributions in the first place, and you would continue to get this boosted state pension for the rest of your life.
Just bear in mind that you can usually only pay for gaps in your national insurance record from the past six years.
So you have until April 5, 2020 to make up for gaps for the 2013/14 tax year.
The rules on how much you pay are also slightly different if you’re self-employed and buying class 2 contributions.
Should I boost my state pension?
Firstly, use Gov.uk to . Once you know this, you can decide whether you need a top-up.
But the Department for Work and Pensions (DWP) warns that voluntary contributions do not always increase your state pension and the rules are particularly complicated for those who will have built up an entitlement under both systems.
So you should to find out if you’ll benefit.
Financial provider Royal London has also put together a that helps you to understand your state pension and how to calculate if it’s worth buying extra national insurance credits.
It director of policy, former pensions minister Steve Webb, points out that those on means-tested benefits should bear in mind that an increased pension could reduce benefits such as pension credit or housing benefit.
He adds that those in poor health may also pay more for the contributions than they get back in higher state pension payments if they don’t live long enough.
“The rules for topping up your state pension are complicated. But if you can afford to make voluntary class 3 national insurance contributions, the rewards can be large relative to the cost of doing so,” said Mr Webb.
You may also want to before you decide to make voluntary contributions.
And if you decide topping up is right for you, see for information on how to set-up the payment.
New research has revealed that women are £106,000 worse off than men at retirement due to lower paid jobs and part-time work.
While Martin Lewis has issued an urgent pensions warning for millions of workers who could be missing out on £1,000s a year.
But on a more positive note, the state pension could rise by 4 per cent next year – giving the elderly £351 extra a year.
We pay for your stories! Do you have a story for The Sun Online Money team? Email us at money@the-sun.co.uk