If you want to claim the state pension, you need to have made National Insurance contributions for 35 years. But what if you haven’t done that?
Perhaps you quit work to raise the children or care for an elderly relative. Maybe you had a lengthy period of unemployment or couldn’t work because of a long-term illness or injury.
Well, you might be able to fill gaps in your National Insurance record by purchasing National Insurance credits.
You can then be certain that you’ll qualify for the state pension and boost your retirement income.
Rules are changing - so don’t delay
A man born after April 5th 1951 and a woman born after April 5th 1953 can currently pay to fill gaps in their National Insurance record to as far back as 2006.
But from April 5th this year, you can only plug missing contributions from the past six years.
So if you have gaps in your record going back further, you have only a matter of weeks to act, or you’ll miss out.
I have a pension already – why do I need National insurance credits?
You may already have a private pension and several workplace pensions. But since you’re entitled to receive further income from the state, it would be foolish to turn it down.
While a state pension won’t be enough to live off by itself, it could be a valuable top-up to the rest of your pension income, particularly if you haven’t saved as much as you would have liked.
How much could I make?
Plugging this gap can yield significant returns further down the line. Let’s say you have ten years missing in your National Insurance record, so you fill it by paying for £8,000 of National Insurance credits.
Over the course of a retirement lasting for 20 years, that could work out to an extra £55,000 in state pension funds.
That could represent the difference between you simply making ends meet in later life, or spending your retirement pursuing your goals and passions.
It’s important to have a good idea how much you’re likely to get from your pension, so you can take steps to maximise your income in the meantime.
To find out if you have any gaps in your National Insurance contribution record, you can use a handy tool on the government website.
