Martin Lewis urges Brits to review their State Pension forecasts and explore potential increases. HMRC reports a surge in individuals topping up NI records, highlighting the opportunity to maximize retirement income.
Consumer champion Martin Lewis is urging the public to review their State Pension projections for potential enhancements to their retirement funds. In the latest MoneySavingExpert (MSE.com) newsletter, he explained how working years in Britain accumulate National Insurance (NI) credits, a key determinant of one's State Pension size. He stated, 'Every year worked in the UK builds up National Insurance years (as can looking after your child, caring or being ill).
Most people now need roughly 35 years to qualify for the full New State Pension of currently £221 per week for a single person. This payment is taxed as other income and is currently paid when you hit 66 whether you still work or not. Do check your State Pension forecast and see if you can boost your State Pension.' In related news, HM Revenue and Customs (HMRC) disclosed this week that beneficiaries filling in NI record gaps to increase their State Pension have contributed a total of £35 million since last April through an online service. With gentle reminders from both HMRC and the Department for Work and Pensions (DWP), individuals are reminded they have a limited window until April 5th to check their NI history and address any shortfalls extending back to April 6, 2006. From April 6, 2025, voluntary NI contributions will be restricted to the previous six tax years, aligning with typical timelines. Since the online platform's launch in April of the previous year, approximately 37,000 individuals have contributed to topping up over 68,000 years' worth of State Pension, according to the Daily Record. HMRC reports that two-thirds (65%) of the years topped up thus far are from 2017 onwards, with the average online top-up payment amounting to £1,835. The largest weekly State Pension increase made has been £113.76. HMRC recommends utilizing the 'Check your State Pension forecast' service on GOV.UK as the most convenient and efficient way for people to verify their retirement pension and take necessary action. The HMRC app can also be used for checking state pension forecasts. Credits may be available for those not paying NI, and eligibility can be checked on GOV.UK. Angela MacDonald, HMRC's second permanent secretary and deputy chief executive, stated: 'There are just two months left to check and fill any gaps in your national insurance record from 2006 onwards to boost your State Pension entitlement. People should also be wary of scammers posing as the revenue body and should never share their HMRC login details with anyone.' Rosie Hooper, a chartered financial planner at Quilter Cheviot, added: 'For those with gaps in their record - especially people in their late 40s, 50s, and 60s - checking eligibility should be a priority. The average online top-up payment is £1,835, so paying a relatively small price now could have a substantial impact on your financial wellbeing in retirement.' Investing in your pension now could result in significant financial benefits later, as emphasized by Sir Steve Webb, a former pensions minister and current partner at pension consultants LCP (Lane Clark and Peacock). He highlighted: 'In some cases, a few thousand pounds paid now could translate into tens of thousands in additional pension income over retirement, making it one of the most financially rewarding decisions they can make. However, it's crucial to ensure that paying voluntary contributions will actually lead to a higher State Pension.' Webb also advised: 'For most people who are short of a full State Pension, top-ups are generally excellent value for money, with the cost being recovered within three to four years of retiring.' Additionally, he stressed the urgency of the situation: 'This is likely to be the last opportunity to fill gaps more than six years back, so it is worth everyone checking their pension forecast and seeing if a top-up would be worthwhile.
STATE PENSION NATIONAL INSURANCE MARTIN LEWIS HMRC RETIREMENT PLANNING FINANCE
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