‘Smart financial move’ could see you boost your UK state pension
Plugging National Insurance gaps could boost a state pension
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The state pension is linked to a person’s National Insurance record, meaning someone who has gaps could get less than the full amount.
Checking for gaps, and filling them where possible, may be worthwhile in order to boost one’s income in retirement, an expert has warned.
Mark Routen, head of tax at Hoxton Capital Management, told GB News: “Boosting your UK state pension by plugging gaps in your National Insurance record is a smart financial move that can provide you with a higher retirement income.
“If you are looking to enhance their state pension, understanding the process and options available is crucial.”
There are various reasons people might have gaps in their National Insurance record
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To get any state pension at all, a person will usually need at least 10 qualifying years.
For the full new state pension, for instance, a person generally needs at least 35 qualifying years, while a person typically needs 30 qualifying years for the basic state pension.
There are various ways to plug gaps in one’s National Insurance record.
For instance, people can claim National Insurance credits, backdate contributions and/or make voluntary contributions.
Claiming National Insurance credits
People may be able to get National Insurance credits if they aren’t paying National Insurance, such as if they’re claiming benefits because they are ill or unemployed.
These credits can help to fill gaps in a National Insurance record.
Some will be paid automatically but others must be applied for.
For example, parents or guardians who are registered for Child Benefit for a child under 12 can get Class 3 National Insurance credits automatically.
Eligible family members, such as grandparents who haven’t reached state pension age, who have cared for a child under 12 at any time since April 6, 2011 may qualify for National Insurance credits.
These credits, known as Specified Adult Childcare Class 3 credits, need to be applied for, and the child’s parent or guardian who gets Child Benefit will need to agree to transfer the credit.
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Backdating National Insurance contributions
It may be possible to backdate National Insurance contributions, Mr Routen said.
He told GB News: “In certain cases, you may be able to backdate contributions to fill gaps from previous years.
“The ability to backdate depends on your specific circumstances, so seeking advice from the UK government's official website or a financial advisor is recommended.”
Making voluntary National Insurance contributions
Those who are unable to claim National Insurance credits but have gaps in their record may consider making voluntary contributions.
However, it’s crucial people are aware that voluntary contributions don’t always increase the state pension, and seeking financial advice may be beneficial.
People who aren’t yet state pension age can contact the Future Pension Centre to find out if they’ll benefit from voluntary contributions.
Those who have reached state pension age can contact the Pension Service to find out if they will benefit from voluntary contributions.
There are two types of voluntary contributions – Class 2 and Class 3.
Mr Routen explained: “Class 2 contributions are usually paid by self-employed individuals, while Class 3 contributions are open to everyone.
“It's worth noting that there are deadlines for making voluntary contributions, so staying informed about these dates is essential.”
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