More than 600,000 people paying to boost their state pensions
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Since the introduction of the flat-rate system in 2016, more than 600,000 people have paid to increase the state pension
More than 600,000 people have paid to increase their state pension since the introduction of the flat-rate system in 2016, new figures show.
But hundreds of thousands who haven’t already done so risk missing out on the opportunity to fill old gaps in their National Insurance (NI) contributions before a deadline next month.
The full state pension is paid to those who have paid NI contributions for at least 35 years. Anyone falling short can pay to fill gaps for specific years.
Supplement: The full AOW is paid to those who have paid NI contributions for at least 35 years. Anyone falling short can pay to fill gaps for specific years
It costs £15.85 for a missing week of NI, which equates to £826.50 for a whole year. This increases your pension by £275 a year, or £5,500 over a 20-year pension.
Normally you can only pay for the last six years, but a special concession allows savers to fill the gaps for another ten years, until 2006.
This extension expires in April, so savers have one month to top up for those years.
According to official data, one in three AOW recipients did not receive the full allowance as of March 2020. This corresponds to 3.8 million people.
A freedom of information request filed by asset manager Quilter found that an average of 123,000 people pay for the boost each year.
According to Quilter, it would cost more than £8,000 to fill a ten-year gap, but would result in a £55,000 boost over a 20-year retirement. Check your NI details at: gov.uk/check-national-insurance-record.
l.purkess@dailymail.co.uk