Some people only have until April to completely change their retirement outlook (Image: GETTY)
Just over half of UK retirees receive the full amount of , currently £221.20 per week, or over £11,500 a year. This is usually because a person’s national insurance record is lacking making them ineligible for the full sum, while a few may not be able to receive a penny at all.
There are four ways Brits can boost their national insurance record and give themselves the best chance of being in the half that does receive the full amount.
However, they may need to take action quickly as one of these routes is closing on April 5.This is the deadline for voluntary national insurance contributions dating back to 2006.
Essentially, if you went a year without paying national insurance or claiming national insurance credits between 2006 and 2018 you can fill this hole by voluntarily paying national insurance before April. If you pay after April, you’ll only be able to backdate it by six tax years, to the 2018/2019 tax year currently.
To be eligible for any part of the new you need a minimum of 10 qualifying years, that includes paying national insurance, receiving national insurance credits or paying the equivalent voluntary national insurance.
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For instance, if you reach the age at the year’s end and currently have only three qualifying years, missing the April deadline will mean you can only make six years’ worth of voluntary contributions. This will give you a total of nine years, making you ineligible for any new .
To receive the full , you need at least 35 qualifying years. So meeting this April deadline can also benefit those nearing age who wish to maximise their potential income. urged people to speak with an expert before making voluntary contributions as these usually can’t be refunded.
The reports that each qualifying year can add approximately £328.64 to your . The cost of making voluntary contributions changes annually; currently, it’s £3.45 for a week’s worth of Class 2 contributions and £17.45 for a week of Class 3.
If you lack several qualifying years, it may be worthwhile to check if you need to claim any national insurance credits. These credits are sometimes automatically added to your record, but you might be able to claim them for periods when you were not working and receiving benefits like Jobseeker’s Allowance, Employment and Support Allowance (ESA), or maternity allowance.
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Moreover, a significant gap in your national insurance record could be due to a minor error. This might mean credits weren’t correctly applied, which could affect your eligibility for the .
Another method to enhance your is by deferring it. This occurs automatically if you receive your letter from the and don’t act upon it when you reach age.
Even if you qualify for the maximum , deferring it can increase your payments when you eventually claim. This could also be a way to avoid being taxed on your if you continue to earn other income after reaching age.
You need to defer your pension for at least nine weeks, and any time spent in prison or while you or your partner are receiving certain benefits won’t count towards this period. For every nine weeks you defer, your increases by 1%, so deferring a full for 52 weeks could boost it by over £600 annually.