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State Pension Boost

At present everyone receives a State Penson when they reach retirement age.  To receive a state pension, you need to have collected a number of Qualifying years.  This is done in a different ways.  If you are working and/or self employed.  You pay your National Insurance with in your self-assessment or wages.  Also if you are on Maternity pay (MP), Raising Children or claiming Universal Credits (UC), you will receive credits to your qualifying years.

 

The problem is if you have not received enough qualifying years by the time you retire, you will likely get a reduction in State Pension.

 

How Qualifying years works, you will need to have paid or received credits for a whole year.  Sometime you may have only paid in 90% of a year.  But that year is deemed as not paid.  So even though you have paid in some of the year.  The whole year does not class as a qualifying year and is lost.  This could reduce the amount of pension you receive by thousands.

 

So why is it Urgent, The government (HMRC)  have said that there will be a limit on how many years back you can contribute to.  At present you can go back to 2006.  After April you can only go back 6 Years.  I.e after the deadline date you cannot make a payment part/non paid year.  So, you lose that year as a Qualifying year. 

This deadline was extend to 5th April 2025.

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Martin Lewis done great section on it.  Which I have included the Link below.  It a must watch

So, What you need to do?

 

  • You need to check you have any years you have not paid ( below I will go over setup a government Gateway account Accounts, so you can checkyour current position  )

  • For the years you have not paid fully for.  BEFORE YOU BUY MORE YEARS THE YEAR (pay the outstanding amounts) read below

 

  1. If you are under 45 you may have enough years left of work to pay the full Contribution.   The full contribution is around 35 years approx. (check your online Personal tax account to get the correct amount of years).  Working life is 45 Years. So you only have to work 35 ish years to get the full pension. If you check your Personal Pension statement, you will see how many years you have fully paid and you can work out how many more years you have left at work.  This will give you an idea if you have to pay the missing years or not.

  2. Check on the Gov.uk National Insurance Credit page, if you are due for credits for carers, Childcare and illness

  3. Watch Martin Lewis youtube video (above)

 

  • Forward this e-mail to Friends and Family.  This e-mail could help them get Thousands of Pounds in their retirement that they may be missing. 

  • If you are a Higher Tax payer or close to being one,  You should get Professional Advise.  As there are many factors that effect you.

  • You should contact the government Future Pension Centre for a bespoke calculation.  This will help you see if it is worth Buying Pension years.

  • JSJ Accountants are not financial advisers, we are just highlighting a deadline that can affect you.  You need to seek advice from experts before buying years of NI Contributions and/or do your own research.  You can pay more than you get back.   

 

Also Visit Money Saving Expert to find out more.  https://www.moneysavingexpert.com/news/2022/10/martin-lewis--how-to-boost-your-state-pension-if-you-re-aged-bet/

 

How to Set up a government Gateway  Account

You’ll need your National Insurance number or postcode and 2 of the following:

  • a valid UK passport

  • a UK photocard driving licence issued by the DVLA (or DVA in Northern Ireland)

  • a payslip from the last 3 months or a P60 from your employer for the last tax year

  • details of a tax credit claim if you made one.

  • details from a Self Assessment tax return if you made one.

  • information held on your credit record if you have one (such as loans, credit cards or mortgages)

 

https://www.gov.uk/personal-tax-account

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Scroll down and Click on Start now

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HMRC Log in.JPG

Follow instruction, It will ask personal Details, and take you through security and identify proof.

You will get a Government Gateway ID and have a chance to set up a password.

Once you have access to your personal page.  You will be able to go down to Pensions section and click on ‘View your National Insurance record.

Here you will see which years are all fully paid/Credit.  It will say Full years.  Also you will see how many years you need to get a full Pension.

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