12 ways to boost your state pension by up to £5,000 without paying extra
THE full state pension is worth £11,502.40 this tax year, but to get the whole amount, you’ll need to have 35 years of National Insurance (NI) contributions.
If you have more than ten years of contributions, you’ll get at least a portion of the state pension, and if you have less than that you won’t qualify at all.
Typically, you make these contributions when you’re working, either through your PAYE salary, or through your tax return if you’re self-employed.
But if you’re out of work because you’re sick or have caring responsibilities, you can usually claim NI credits to fill out your record and boost your state pension eligibility.
The government’s MoneyHelper website estimates that one year of NI contributions is worth at least £5,000 in state pension over a typical retirement, so it’s really important to claim what you’re entitled to.
Even better, they’re free to claim, which means you can boost your retirement income without spending a penny.
It is possible to buy missing years of NI to top up your state pension, but this is only worth doing if you’re still short after you’ve claimed any NI credits you’re eligible for.
You can see your NI record and any missing years by using the government’s checker tool.
Full list of reasons you can claim NI credits
Here are all the different reasons you can claim credits and how to apply for them.
If you’re a parent or guardian
If you’re registered to receive child benefit for a child under the age of 12, you will get Class 3 credits automatically.
If your household would have to pay the high-income child benefit charge, you can tick a box when you apply that says you do not want to receive the money, and you’ll still get the NI credits.
If you’ve made the child benefit application in the higher earner’s name, you can apply to transfer the NI credits between partners or guardians.
For instance, if one parent is on leave and doesn’t earn enough to pay NI, they should get the credits.
If you’re a foster carer, or a kinship carer in Scotland, you need to apply for the credits. There’s more information on how to do this on gov.uk.
If you were a parent or guardian who got child benefit between April 1978 and April 2010, you might need to retrospectively apply for Home Responsibilities Protection.
If you’re on Universal Credit
You get Class 3 NI credits automatically.
If you’re looking for work.
If you receive Jobseeker’s Allowance and you’re in education or working 16 or more hours a week, you should get Class 1 NI credits automatically.
If you’re unemployed and looking for work and you’re not getting Jobseeker’s allowance, you’ll need to contact your nearest Jobcentre to apply to get the credits.
If you’re ill or disabled
Anyone who receives Employment and Support Allowance (ESA), or Unemployability Supplement or Allowance will get Class 1 NI credits automatically.
If you’re not on ESA but would be eligible then you should apply for the benefit so that you can also get the NI credits.
If you’re on Statutory Sick Pay (SSP) and do not earn enough to get a qualifying year on your NI record than you can apply for credits.
If you’re on maternity, paternity, or adoption pay
Anyone on maternity allowance should be getting class 1 NI credits automatically.
If you’re on statutory maternity, paternity, or adoption pay, you might be earning enough to pay qualifying years.
If you’re not, you can apply for credits.
If you’re a carer
Anyone who gets Carer’s Allowance payments should get Class 1 credits automatically. If you’re in Scotland, you should get these if you qualify for Carer Support Payments.
If you’re receiving Income Support and providing substantial, regular care, you should get Class 3 credits automatically,
If you don’t get benefits but care for one or more sick or disabled people for 20 hours a week, you can apply for Class 3 Carer’s Credits, but you should also check that you’re receiving all the benefits you’re eligible for.
If you’re a grandparent or another family member providing care for a child
Parents can transfer their National Insurance Credits both between themselves, but also to other family members providing care.
If the parent of the child you look after agrees, and you’re an eligible family member who is over 16 but below State Pension Age, you can apply for Specified Adult Childcare Class 3 credits.
How does the state pension work?
AT the moment the current state pension is paid to both men and women from age 66 - but it's due to rise to 67 by 2028 and 68 by 2046.
The state pension is a recurring payment from the government most Brits start getting when they reach State Pension age.
But not everyone gets the same amount, and you are awarded depending on your National Insurance record.
For most pensioners, it forms only part of their retirement income, as they could have other pots from a workplace pension, earning and savings.
The new state pension is based on people’s National Insurance records.
Workers must have 35 qualifying years of National Insurance to get the maximum amount of the new state pension.
You earn National Insurance qualifying years through work, or by getting credits, for instance when you are looking after children and claiming child benefit.
If you have gaps, you can top up your record by paying in voluntary National Insurance contributions.
To get the old, full basic state pension, you will need 30 years of contributions or credits.
You will need at least 10 years on your NI record to get any state pension.
If you get Working Tax Credit
If you’re on Working Tax Credit, you might get credits automatically. To qualify, you’ll need to be an employed earner with earnings below the Lower Earnings Limit (currently £6,396 per a tax year) or have profits of less than £6,725 if you’re self-employed.
If both you and your partner is on Working Tax Credit only one of you can get the National Insurance credits.
You need to check your State Pension Record to check if you’re getting the NI credits and apply if not.
If you’re in training
If Jobcentre Plus sends you on a government-approved training course that lasts over a year, you should get Class 1 credits automatically, as long as you’re over 21.
If you weren’t put on the course by your jobcentre, you can still apply for credits.
If you do jury duty
As long as you’re not self-employed, you can get Class 1 credits when you do jury duty.
You need to write to the government and claim them.
If you’re married to someone in the army
If you’re married to someone in the forces and you’ve been posted overseas since 2010 you can apply for Class 1 credits.
If you were posted overseas between April 1975 and 2010, you can apply for Class Three credits, as long as you reached state pension age on or after April 6, 2016.
If you were wrongly imprisoned
If your conviction was quashed by the Court of Appeal (or the Court of Criminal Appeal in Scotland) you can apply for Class 1 credits.
How to apply for National Insurance Credits
If you need to apply for credits, or think you should be receiving them when you’re not, then you need to send a letter to HMRC.
The address to write to is: PT Operations North East England, HM Revenue and Customs, BX9 1AN, United Kingdom.
You’ll need to include your NI number, say which years you’re applying for, and explain why you are eligible to get the credits.
What is National Insurance?
NATIONAL Insurance is a tax on your earnings, or profits if you're self-employed.
These contributions make you eligible for things like the state pension and certain benefits.
You’ll usually pay National Insurance Contributions (NICs) when you’re over the age of 16 and earning a certain amount.
For example, if you earn £1,000 a week, you pay nothing on the first £242.
Earn over that and you pay 10% on the next £725 – so £72.50. Then you pay 2%o on the rest, so £33, which works out as 66p.
For the self-employed rates are slightly different.
You can also get something known as National Insurance in some circumstances when you’re not working, for example when you have kids and claim certain benefits.
NICs are usually taken automatically by your employer and paid to HMRC, so you don’t need to do anything.
You can see how much NICs you pay on your wage slip.
Anyone working for themselves usually has to pay NICs themselves when completing a self-assessment tax return.