Martin Lewis has urged workers aged 45 to 70 to check their National Insurance (NI) records before rules change in April 2023, potentially turning an £800 payment into £5,500 in extra state pension.
Currently, people can buy back missing NI years as far back as 2006. However, from April 5, 2023, the window will shrink to just six years. Lewis, founder of MoneySavingExpert, said: “When the transitional arrangements end, the number of extra years purchasable drops, so checking now is key.”
The full new state pension is £185.15 a week, requiring 35 qualifying NI years. Each voluntary NI year costs around £800 but can add £275 annually to your pension. Lewis explained: “If a man who's reached age 66 lives the typical 19 more years, a woman 21 more years, then for each £800 spent, a man can expect to get £5,300 extra pension, a woman £5,800.”
However, Lewis cautioned that the calculation depends on individual circumstances. Some people may qualify for free NI credits through benefits or statutory sick pay, and others may not benefit if they are low-income and eligible for pension credit, or if buying years pushes them into the 40% tax bracket.
Before purchasing, Lewis advises contacting the Future Pension Centre on 0800 731 0175 and using the Gov.uk state pension forecast calculator. If buying is beneficial, you must obtain a reference number from HMRC and pay into their bank account. The cost for a full year ranges from £795.60 to £824.20 depending on the tax year.
