State pension boost: National Insurance option could increase amount you get | Personal Finance | Finance
State pension payments typically hinge on a person’s National Insurance record. For the new state pension, 10 qualifying years are usually required to get anything at all.
Some 35 years are necessary if a person is hopeful of receiving the full new state pension.
However, it is worth noting some may get less than the full new state pension if they were contracted out before April 6, 2016.
With many people falling short of the National Insurance requirement, they could be disappointed at retirement to get less than the full state pension sum.
Express.co.uk spoke exclusively to Andrew Tully, technical director at Canada Life, who outlined the actions Britons can take.
READ MORE: State pension age: Britons fall below ‘comfortable’ living
“Voluntary NICs will currently cost you around £800 for one year’s credit of Class 3 contributions.
“They can be a very good deal.”
As Mr Tully highlights, voluntary Class 3 payments currently cost £15.40 per week, adding up to £880.80 across a year.
Each extra qualifying year a person pays towards will add 1/35th of the new state pension.
It can help many Britons reach the right amount of National Insurance contributions needed for a full new state pension.
Alternatively, Mr Tully highlighted the system of National Insurance credits which can also help people.
He explained: “You can apply for NI credits if there are gaps in your record, for example, if you received a Carer’s Allowance, Child Benefit, a record of signing on and claiming Jobseeker’s Allowance.
Class 1 NI credits count towards a state pension and may help people qualify for some benefits.
Whereas Class 3 credits count towards a person’s state pension only.
If a person applied for credits but they are wrong on their record, they should contact the office where they applied.
Mr Tully concluded: “It can make financial sense to make up any predicted shortfall if you won’t have the 35 qualifying years for the full state pension by your state pension age.
“You can’t claim back any overpaid voluntary NI contributions if you find yourself with more than the 35 years in the future.”
It is important to note that voluntary NI contributions do not always increase the state pension, the Government states.
Consequently, people should contact the Future Pension Centre to find out whether they can benefit.
