People have been urged to check if they can increase their state pension payments as many may have missed out on National Insurance (NI) credits that count towards their state pension. Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said many women may have missed out on “valuable” NI credits towards their state pension while at home looking after children.
She said: “If they claim Child Benefit, they will receive NI credits that count towards their state pension.
“Many women have missed out on this in the past because their husband claimed the Child Benefit rather than them.
“Others missed out when they opted out of Child Benefit after the introduction of the high-income Child Benefit tax charge.
“However, you can register for Child Benefit without claiming the cash – so there’s no charge to pay but you still get the credits. If you claim Child Benefit in your name, then you will get the NI credit towards your pension.”
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A person may also qualify for NI credits if they care for a family member under the age of 12 while the child’s parent or main carer goes to work, under Specified Adult Childcare Credit.
This applies to those who are under state pension age, which is currently 66 for both men and women.
People with gaps in their NI record can also voluntarily buy contributions. A person typically needs 35 years of contributions to get the full new state pension.
A full year of credits costs around £800, but buying a small amount of credits across several years can boost a person’s payments significantly over the course of their retirement.
A woman recently appeared on Martin Lewis’ ITV show after she topped up her contributions by just under £1,000, and is now on track to get an extra £10,500 in payments.
Ms Morrissey said: “For each year bought, you get one 35th of a year’s state pension – around £275.
“This means you effectively earn your money back in around three years, so it can prove very good value.”
People can usually buy contributions as far back as six years ago but at the moment, people can buy contributions up to another 10 years further back, as far as 2006.
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This opportunity will only last until the end of June, after which people will only be able to buy credits as far back as six years ago.
The financial expert urged Britons to contact the DWP before purchasing contributions. She said: “It is hugely important that you speak to DWP before parting with any money for voluntary National Insurance credits as they can confirm if you will definitely benefit from buying them.
“In some instances, such as if you were contracted out for instance, you may not benefit from the extra credits.”
Ms Morrissey also encouraged those of state pension age to see if they can boost their payments with Pension Credit.
This tops up the income of those on low incomes and the benefit has also just increased by 10.1 percent.
With the uprating, single claimants now get a top up to £201.05 a week while couples get their income topped up to £306.85 a week.
Those on the benefit also qualify for a £900 cost of living payment, which is being paid in three instalments over this financial year.
The first instalment of £301 is due to be paid for most people on eligible DWP benefits between April 25 and May 17.
State pension payments went up 10.1 percent this week, with the full basic state pension paying £156.20 a week while the full new state pension has gone up to £203.85 a week.
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