MARTIN Lewis has revealed “one of the best returns you’ll ever get” for anyone saving for retirement.
The consumer expert has shared the news of the upcoming National Insurance (NI) backfill deadline being extended.
Martin Lewis has revealed ‘one of the best returns you’ll ever get’ for anyone saving for retirementRex
The scheme allows people to fill in gaps in their NI history all the way back to 2006 to top up their state pension.
It was set to end in April before being extended to July 31, this was down to DWP phone lines being jammed in the run up to the initial deadline.
The deadline has now been extended for a second time to April 5, 2025.
Writing on Twitter Martin said: “The deadline for buying missing National Insurance years for your state pension back to 2006 has just been extended again to April 2025 (was July 2023)
“I suspect it isn’t a coincidence that this announcement comes the day before my ITV ML Money Show special on it, with the pensions minister coming on, knowing I was going to go hard about people having to call the Future Pensions Service 100s times before they get an answer.
“Overall though the extension is very good news.”
People might have gaps in their NI record for various reasons, like if you were unemployed or if you took time out of the workforce to raise kids.
If you don’t fill in the gaps you could end up missing out on the full state pension when you retire, which at the moment is worth £203.85 a week or £10,608 a year.
Martin encouraged followers to watch his Money Show tonight for more information and added that filling in holes is “is one of the best returns you’ll ever get!”
It takes 35 “qualifying” years of NI contributions to get the full new state pension and at least 10 years to get anything at all.
Currently you can backfill holes from 2006 to 2016.
After April 5, 2025, though you’ll only be able to backdate payments by up to six years.
Although, this scheme only applies to people who reached – or will reach – state pension age after April 5, 2016.
HMRC has said that the revised deadline will enable “tens of thousands” more people to plug the gaps which can boost their pensions by thousands in retirement.
You can check how many years of NI payments you’ve made and see any missing years on the government website.
How to top up National Insurance contributions and how much you can get
In some cases, buying back missing years can be really valuable.
But, it isn’t free so your voluntary contributions do come at a price and you should always check if it’s right for you.
If you’re filling gaps between 2006/07 to 2015/16 you’ll pay the 2022/23 rates for contributions.
It works out to be 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 who tops-up their record after April 2025 will pay those rates.
Though before making voluntary contributions, you need to get a pension forecast and speak to the Government’s Future Pension Centre.
This is because there are some situations in which paying historic contributions wouldn’t boost your state pension.
You can check the full list of who’s eligible for claiming credits on the government website.
It explains the circumstances where you’ll need to claim and when you’ll get it automatically.
Here’s the full list of reasons you might have gaps in your record and risk missing out on the full payment.
Plus, here are four of the best ways to boost your retirement pot and two to avoid.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]