Get £5,000 extra State Pension – one easy step can boost YOUR entitlement for life | Personal Finance | Finance

The State Pension pays just £9,339 a year and many people get even less than that. Now pension experts are urging people to make sure they qualify for their maximum entitlement. Here’s how.

Getting the State Pension is not an automatic right. You need to make sufficient qualifying National Insurance (NI) contributions during your working lifetime to build up your entitlement, said Becky O’Connor, head of pensions and savings at Interactive Investor. “If you have less than 10 years of NI contributions, you will get nothing at all.”

You need 35 years to get the full basic State Pension, but many end up with a shortfall through no fault of their own.

Women are most likely to come unstuck, typically after giving up work to raise a family. Others lose out after periods of illness or unemployment.

The good news is that they can plug the gaps in their record by claiming National Insurance credits and this is well worth doing, according to Government-funded financial guidance site moneyhelper.org.

Each year of NI contributions gives you an extra £250 a year in State Pension. Over 20 years, this adds up.

Moneyhelper states that: “One year of National Insurance contributions can easily turn into £5,000 or more in State Pension over the course of a typical retirement.”

National Insurance credits are a way of maintaining your NI contributions record when you cannot make them in the usual way.

They help you to build up “qualifying years” towards your overall entitlement, plugging any gaps in your record.

You can claim them for any period when you were claiming benefits due to ill health or unemployment.

Also for periods when you stopped working while on maternity or paternity leave, or when receiving adoption pay.

NI credit are primarily aimed at mothers who give up work to raise a family, so can be claimed by those looking after a child under 12.

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There are other reasons why people may have gaps in their NI record. For example, if they were employed but had low earnings, or were self-employed but did not pay NI contributions because their profits were too small.

Those living or working outside the UK or who took career breaks for any other reason may also have gaps.

They may not be able to claim NI credits but can buy additional State Pension by making Class 3 voluntary contributions, said pensions specialist Andrew Tully, technical director at Canada Life.

These cost £15.40 a week for one year’s pension, or around £800 a year. “Each year you buy will boost your state pension by around £250 a year for life,” Tully said.

This could be a brilliant deal because each £800 could end up buying you £5,000 in total State Pension over the course of a 20-year retirement.

You can only go back for the previous six years so the sooner you start making up any shortfall, the better.

Find out where you stand by visiting Government portal gov.uk/check-national-insurance-record.