MARTIN Lewis has issued a fresh warning to millions who must act ahead of a crucial HMRC deadline.

In his weekly newsletter, the financial guru warned readers about the importance of buying National Insurance (NI) years to boost their state pension.

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To qualify for any state pension, you need a minimum of 10 years’ worth of NI contributions, and 35 years are required to receive the full amount. 

Career breaks, such as those taken to raise children, can result in gaps in your NI record, potentially reducing your state pension entitlement.

Fortunately, you can purchase years or claim free credits to fill these gaps.

Those under 75 have until April 2025 to buy back any missing NI years from the period 2006-2016.

These contributions are crucial for ensuring you receive the maximum state pension.

The founder of MoneySavingExpert.com said: “While ‘boosting your State Pension’ doesn’t sound sexy, this is about big money, and we’ve had huge successes.

“It’s the most lucrative thing many under age 73 can do, some gain £10,000s.

“The deadline’s half a year away, but the process ain’t quick, so start now.”

Martin added that for every £825 or less you pay to buy NI years, many stand to gain over £5,400.

Typically, strict time limits apply to buying back these years. 

However, when the new state pension was introduced in 2016, the rules were relaxed to aid the transition.

This relaxation was initially set to end in April 2023 but has been extended until April 2025.

It means that from May 2025, you will only be able to buy back six tax years, starting from 2019.

Although several months remain until this deadline, Martin has urged his readers to “just get on with this and do it now.”

Before considering purchasing any missing years, checking if you can obtain some years for free with NI credits is essential.

We have outlined the process you need to follow to boost your state pension below.

CHECK YOUR YEARS

If you think you’re missing National Insurance years, the first thing to do is check you State Pension forecast.

You can check this as well as the State Pension age through the government’s new ‘Check your State Pension’ tool online at www.gov.uk/check-state-pension.

The tool is also available through the HMRC app, which you can download free on the Apple App Store and Google Play Store.

You’ll need to log in using your Personal Tax Account login details. If you don’t already have an online HMRC account, you can register at gov.uk.

It shows you how much your state pension could increase by and what NI years you’ll need to buy to achieve this.

You’ll then be able to pay for these missing years securely online, without having to call up separately.

You’ll need to pay for these in full – you can’t pay in instalments.

You can’t use the online service if you’re already getting your State Pension.

Instead, you’ll need to call the Pension Service on 0800 731 0469.

However, before you commit to buying new National Insurance years it’s vital you check whether you were entitled to free credits at any point.

CHECK FOR NATIONAL INSURANCE CREDITS

Before making a voluntary contribution, it is important to check if the gaps in your contributions can be filled with free NI credits.

Thousands are thought to be missing out on these NI Credits, leaving them worse off in retirement.

For example, those on certain benefits should qualify for Class 1 credits.

This includes parents with active claims for child benefit.

You can check the full list of people eligible to claim credits by visiting www.gov.uk/national-insurance-credits/eligibility.

It explains the circumstances where you’ll need to claim and when you’ll get it automatically.

TOP UP YOUR NATIONAL INSURANCE YEARS

In some cases, buying back missing years can be really valuable.

But earning back the years isn’t free, so your voluntary contributions come at a price.

If you fill gaps between 2006/07 and 2015/16, you’ll pay the 2022/23 rates for contributions.

It is worth £15.85 a week, which means it costs £824.20 to buy one year of contributions.

As the state pension was £185.15 per week in 2022/23, this boost would add £5.29 per week or around £275 per year. 

Although you’d have to pay £8,242 (10 lots of £824.20), the annual state pension boost would be around £2,750.

Someone who was retired for 20 years would get back around £55,000 in total (before tax).

Anyone under 73 can make voluntary pension contributions, as it’s assumed everyone under this age will claim the new state pension.

If you’re below the state pension age, you can check your state pension forecast by visiting www.gov.uk/check-state-pension to determine if you’ll benefit from paying voluntary contributions.

You can also contact the Future Pension Centre by calling 0800 731 0175.

If you’ve reached state pension age, contact the Pension Service to find out if you’ll benefit from voluntary contributions.

You can contact this service in several different ways by visiting www.gov.uk/contact-pension-service.

You can usually pay voluntary contributions for the past six years.

The deadline is April 5 each year.

For example, you have until April 5, 2030, to compensate for gaps in the tax year 2023 to 2024.

The deadline has been extended for making voluntary contributions for the tax years 2016 to 2017 or 2017 to 2018.

You now have until April 5, 2025, to pay.

Find out how to pay for your contributions by visiting www.gov.uk/pay-voluntary-class-3-national-insurance.

In this episode of In Conversation With…, host Kimberley Dondo chats with Julie Greenwood from Octopus Money and Hayley Rabbets from The Verve Foundation about closing the advice gap through industry collaboration. They discuss achieving tangible outcomes, balancing altruism with commercial goals, and why a family-centric approach is key to modern financial advice. Learn how these partnerships can shape the future of financial education and inclusion.

MILLIONS of households on benefits could see their support rise next year.

Payments usually rise every April in order to keep up with the cost of things such as food, fuel or household bills.

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This is known as “uprating” and payments usually increase in line with the previous September’s inflation figure.

Inflation is a measure of how much the prices of everyday goods such as food and clothes, and services such as train tickets and haircuts, have increased compared to a year earlier.

Today, the Office for National Statistics (ONS) published its reading for September, with the figure coming in at 1.7%.

It marks the first time that inflation has fallen below the Bank of England‘s 2% target in three years.

However, the lower rate means the boost to Univeral Credit could be significantly less than what was seen in previous years.

This year the majority of benefits increased by 6.7% although a few rose by as much as 8.5%.

Meanwhile, in 2023 inflation-linked benefits and tax credits were hiked by 10.1%.

The Department for Work and Pensions (DWP) will confirm the figure for April 2025 just before the end of the year.

If the government hikes benefits by 1.7%, a single person aged over 25 who is claiming Universal Credit would receive £400.13 per month.

This is £6.68 per month more than the £393.45 they currently get.

In comparison, last year monthly Universal Credit payments were hiked by £24.71.

Joint applicants aged over 25 may receive around £628 per year if benefits increase by 1.7%.

This is a £10.49 increase on the £617.60 they currently receive.

If the rise is put into place it will work out as a £125 difference over the course of a year.

Meanwhile, those who are single and aged under 25 could see their benefits rise by £5.29, which would take their current payment to £316.97.

For couples under 25, the 1.7% increase would mean their current payment would rise by £8.31 to £489.23.

The exact amount you will get depends on how much you get now, which can vary depending on your circumstances.

The following benefits are also legally required to increase each April in line with the previous September’s rate of inflation: 

• Personal independence payment (PIP)
• Disability living allowance
• Attendance allowance
• Incapacity benefit
• Severe disablement allowance
• Industrial injuries benefit
• Carer’s allowance
• Additional state pension
• Guardian’s allowance

This could mean that those who currently receive the lower rate of Attendance Allowance could see their weekly payment rise by £1.23 to £73.85.

Those on the higher rate of £108.55 will see their weekly allowance rise by £1.85.

In comparison, those on Carers Allowance could see their weekly payment rise by £1.39 to £83.29.

State pension to rise

Today’s inflation figures also further suggest that the state pension is now expected to rise from £11,502.40 to £11,975 per year – a £473 boost.

That’s because of the triple lock system, which sees the state pension rise in line with whatever is highest out of: wages for May to July, 2.5% or September’s inflation figures.

Revised statistics released on Tuesday revealed that growth in employees’ average total pay was 4.1% in the three months to July – not 4%.

The inflation figures published this morning do not outpace this.

Lindsay James, investment strategist at Quilter Investors, said the rise to the state pension would be a “welcome relief” given the loss of the £300 winter fuel payment but it may not be enough.

Chancellor Rachel Reeves made cuts to the benefit earlier this year, meaning 10million not on means-tested benefits would miss out.

She explained: “While it will provide some respite, it will not prevent hundreds of thousands being negatively impacted given those losses at a time when energy bills are on the up again.”

The state pension is set to rise by 4.1% in April 2025 – more than double the September inflation rate of 1.7% announced today (16 October).

The rise, which is subject to official confirmation, is due to the triple lock formula.

Under this, pensions increase each April by the highest of three measures – earnings growth (the year-on-year rise in average earnings for the period May to July), price inflation for the year to September (which was announced this morning as 1.7%) or 2.5%.

The average earnings growth – which was recalculated as 4.1% rather than 4% – is the highest of the three.

This should mean the state pension will increase by 4.1% for 2025/26.

Aegon pensions director Steven Cameron said: “For someone on the full new state pension of £221.20 a week, this would equate to an increase of £9.10 to £230.30 a week, or £11,975.60 a year.

“For those who reached state pension age before 6 April 2016 and who are on the full basic state pension of £169.50, the increase could be around £6.95, bringing them to £176.45 a week – £9,175.40 a year.

“A little-known rule is that any earnings-related element of the state pension, relating to the pre-April 2016 rules, and top ups, are only increased in line with the rate of inflation and not the triple lock.

“Therefore, some may find their overall state pension increase lags behind the 4.1% figure.”

THE UK’s rate of inflation has fallen below the Bank of England’s target for the first time in three years.

The Office for National Statistics (ONS) said the Consumer Price Index (CPI) measured 1.7% in the 12 months to September.

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It comes after inflation rose by 2.2% in the 12 months to August, unchanged from July.

Inflation is a measure of how much the prices of everyday goods such as food and clothes, and services such as train tickets and haircuts, have increased compared to a year earlier.

It’s important to note that when inflation drops it doesn’t mean that prices have stopped rising, it just means they are doing so at a slower pace.

Grant Fitzner, chief economist at the ONS, said lower air fares and petrol prices were the biggest driver for this months fall.

However, households witnessed the first rise in food and non-alcoholic drink inflation since March 2023 last month.

Food and drink inflation rose to 1.9% for the month from 1.3% in August, amid stronger price increases for milk, cheese, eggs and fruit.

The Bank of England has a target of keeping inflation at 2%.

Today’s reading marks the first time in three years that inflation has fallen below the central bank’s target.

The figures also further suggest that the state pension is now expected to rise from £11,502.40 to £11,975 per year – a £473 boost.

That’s because of the triple lock system, which sees the state pension rise in line with whatever is highest out of: wages for May to July, 2.5% or September’s inflation figures.

Revised statistics being released on Tuesday revealed that growth in employees’ average total pay was 4.1% in the three months to July – not 4%.

Today’s inflation figures do not outpace this.

The reading also means that those on benefits could also see their support increase by 1.7% in April.

This is because of “uprating” and payments usually increase in line with the previous September’s inflation figure.

It will be a significantly lower boost than what was seen in previous years.

The Department for Work and Pensions (DWP) will confirm the figure just before the end of the year.

Darren Jones, Chief Secretary to the Treasury, said: “It will be welcome news for millions of families that inflation is below 2%.

“However, there is still more to do to protect working people, which is why we are focused on bringing back growth and restoring economic stability to deliver on the promise of change.”

What it means for your money

The reading has also increased the likely hood that that the Bank of England will cut the base rate again when it meets on November 7.

The BoE raises or lowers its base rate, which dictates what interest rates are charged to banks, in order to control inflation.

By raising, it is supposed to make the cost of borrowing more expensive and control spending, therefore driving down inflation.

The BoE started raising its base rate in December 2021 as the UK economy emerged from the coronavirus pandemic.

But the BoE cut rates from 5.25% to 5% in August, marking the first cut since 2020 in a boon for borrowers.

This could lead to lower interest rates on costly loans such as a mortgage.

Alice Haine, personal finance analyst at Bestinvest said a second interest rate reduction in November “could energise the mortgage market even further with rates falling at an even faster pace”.

She explained: “Average mortgage rates for two- and –five-year fixed-rate deals dropped to their lowest level since May 2023 between the start of September and the start of October.

“While there has been some volatility since then, with some lenders increasing rates amid concerns about Labour’s ‘painful’ Budget and the effect geopolitical tensions in the Middle East might have on oil prices, the general outlook for mortgage rates remains positive.”

For savers, easing inflation can signal an end to competitive rates.

Deals above 5% have become rarer following the last rate cut and another slash could dampen this further.

Alice added that locking in a top rate now before the best deals disappear could be a “sensible strategy”.

Meanwhile, Lindsay James, investment strategist at Quilter Investors, said the rise to the state pension would be “welcome relief” given the loss of the £300 winter fuel payment but it may not be enough.

Chancellor Rachel Reeves made cuts to the benefit earlier this year, meaning 10million not on means tested benefits would miss out.

She explained: “While it will provide some respite, it will not prevent hundreds of thousands being negatively impacted given those losses at a time when energy bills are on the up again.”