Martin Lewis warns time is running out for anyone between 45 -73 ahead of HMRC deadline to claim free cash worth £10,000
MARTIN Lewis has issued a warning to those aged between 45 and 73 ahead of an important HMRC deadline.
The financial guru told listeners of his podcast they should "sit up and listen" about the importance of buying National Insurance (NI) years to boost their state pension.
To qualify for any state pension, you need a minimum of 10 years' worth of NI contributions, and 35 years are required to receive the full amount.
If you took a career break you may have gaps in your NI record, which could reduce your entitlement.
However, workers can choose to buy years they were missing to ensure they meet the full qualifying years for the state pension.
Martin said an important deadline is approaching for those aged 40 to 73 to buy back years to help top up their state pension.
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People have until April 2025 to buy back any missing NI years from the period 2006-2016.
Usually, there are strict time limits on buying back these years.
But when the new state pension was introduced in 2016, it was relaxed to help people with the transition.
This was supposed to end in April 2023 but was extended until April 2024.
However, from May 2025, you will only be able to buy back six tax years starting from 2019.
While there are six months to go, Martin said people should act fast, especially those aged between 40 and 73.
That is because anyone under 73 can make voluntary pension contributions, as it's expected everyone under this age will claim the new state pension.
He said: "[People] between the age of 40 and 73 should be checking whether it is right for them, and you should be doing it now.
"Don't become a deadline buster, where you're doing it on the last day, get it done sooner."
You have to pay money to buy back National Insurance years, with the figure for a full year usually costing £825.
The money-saving pro added that if you are just missing a week off a full year you can pay around £15 to ensure you are not missing out.
He added: "Some people might find they have a partial year, and it's, therefore, a lot cheaper.
"This becomes even more lucrative in their case, to make sure they just get over that final hurdle and do a full year."
Martin said people who pay £825 or less to buy National Insurance years, many gain up to £5,400.
This can rise to well over £10,000, with one listener sharing how she bought back seven years and gained £50,000 pounds.
How to top up National Insurance contributions and how much you can get
Buying back missing years can be really valuable, but it can be costly.
For example, if you fill gaps between 2006/07 and 2015/16, you'll pay the 2022/23 rates for contributions.
It is worth £15.85 a week, which means it costs £824.20 to buy one year of contributions.
As the state pension was £185.15 per week in 2022/23, this boost would add £5.29 per week or around £275 per year.
Although you'd have to pay £8,242 (10 lots of £824.20), the annual state pension boost would be around £2,750.
Someone who was retired for 20 years would get back around £55,000 in total (before tax).
Anyone under 73 can make voluntary pension contributions, as it's assumed everyone under this age will claim the new state pension.
If you're below the state pension age, you can check your state pension forecast by visiting www.gov.uk/check-state-pension to determine if you'll benefit from paying voluntary contributions.
You can also contact the Future Pension Centre by calling 0800 731 0175.
If you’ve reached state pension age, contact the Pension Service to find out if you'll benefit from voluntary contributions.
You can contact this service in several different ways by visiting www.gov.uk/contact-pension-service.
You can usually pay voluntary contributions for the past six years.
The deadline is April 5 each year.
For example, you have until April 5, 2030, to compensate for gaps in the tax year 2023 to 2024.
The deadline has been extended for making voluntary contributions for the tax years 2016 to 2017 or 2017 to 2018.
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You now have until April 5, 2025, to pay.
Find out how to pay for your contributions by visiting www.gov.uk/pay-voluntary-class-3-national-insurance.
How does the state pension work?
AT the moment the current state pension is paid to both men and women from age 66 - but it's due to rise to 67 by 2028 and 68 by 2046.
The state pension is a recurring payment from the government most Brits start getting when they reach State Pension age.
But not everyone gets the same amount, and you are awarded depending on your National Insurance record.
For most pensioners, it forms only part of their retirement income, as they could have other pots from a workplace pension, earning and savings.
The new state pension is based on people's National Insurance records.
Workers must have 35 qualifying years of National Insurance to get the maximum amount of the new state pension.
You earn National Insurance qualifying years through work, or by getting credits, for instance when you are looking after children and claiming child benefit.
If you have gaps, you can top up your record by paying in voluntary National Insurance contributions.
To get the old, full basic state pension, you will need 30 years of contributions or credits.
You will need at least 10 years on your NI record to get any state pension.