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.”

Good morning and welcome to your Morning Briefing for Wednesday 16 October 2024. To get this in your inbox every morning click here.

4.1% rise for state pension

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%.

Platinum growth plans

Belfast-based financial planning and wealth management firm Platinum Financial Planning has laid down plans to embark on a new and ambitious five-year growth strategy as it celebrates two decades in business.

Headquartered in Belfast, the independent financial planning firm also has a London office, allowing it to cater to clients across the UK.

It celebrates its 20th anniversary this month.

Tick tock, TikTok

A growing number of young investors are turning to financial influencers — or ‘finfluencers’ — on social media platforms, such as Instagram, TikTok and YouTube, for investment information and advice, says Simplify Consulting’s Giang Hughes.

TikTok alone has seen a 373% rise in financial content videos over the past year.

This highlights a gap in financial literacy among young people and a need for accessible financial guidance.

Quote Of The Day

Five of the most dangerous words when it comes to money (and life in general) are: ‘it won’t happen to me’.

– Tim Bennett, partner and head of education at Killik & Co, comments on the recent rise in scams as we approach Scam Awareness Week next week

In Other News

Financial services technology provider EV has appointed Sam Turner as director of systems innovation to advance EV’s comprehensive financial planning and advice solutions.

He will focus on the continued evolution of EV’s multichannel solutions and work on streamlining its clients’ advisory processes, helping them navigate challenges and deliver advice more efficiently and effectively.

Designed to support financial institutions and advisory firms with a blend of digital and human advice solutions, EV’s solutions empower firms to deliver a wide range of services to their customers.

Spanning guidance, digital and hybrid advice, through to traditional advice models, EV’s technology helps firms meet diverse customer needs.

Turner brings extensive experience to the role having spent more than 20 years working in financial services, with particular expertise in platforms, pensions investment propositions, and automated financial planning.

He joins EV from Altus Consulting, where he spent eight years, and has also held key consultancy roles with James Hay Partnership and Aegon UK.

Wealthy non-doms lobby UK for Italian-style tax regime (Financial Times)

Trump defends tariff plan while pressing for more Fed influence (Bloomberg)

Jamie Dimon charts JP Morgan expansion plan into Africa (Reuters)

Did You See?

Reassured’s Phil Jeynes says he read Kevin Carr’s latest opinion piece on his recent underwriting experience with interest and “immediately messaged him for two reasons”.

“First, to remind him he remains significantly older than me but also to point out that, much as I agreed with the premise of his writing, I found it a bit heavy on problem and light on solution,” he writes.

“That said, I had to concede I couldn’t really think where the next leap in underwriting evolution was likely to come from either.

“People Kev and my age saying “it’s probably AI” must sound like middle-aged people back in the 1990s suggesting “the internet” as the panacea to all life’s ills. Without context or insight, it’s meaningless rhetoric.”