How topping up your state pension now could lead to ‘considerable’ boost in payments | Personal Finance | Finance

. Avatar

[ad_1]

Topping up your could lead to a “considerable” boost in your state pension, an expert has said.

Britons are urged to act now as they can currently top up over an extended period of years, but only until next April.

Gary Hemming, finance advisor at ABC Finance, told : “By filling gaps in their National Insurance record, individuals can significantly enhance their state pension.

“For example, adding an extra year of contributions could increase the weekly state pension by around £5.82, translating to an additional annual income of about £302.64.

“This increment, though it appears modest weekly, accumulates to a considerable amount over the years of retirement.”

People can usually pay for contributions as far back as six years ago but this is currently extended by another 10 years, as far back as April 2006. The deadline to secure the extended top up is the end of this tax year.

Mr Hemming urged people to act now to take advantage of the extended period and not to put off applying for it.

He said: “Acting now to top up NI contributions is wise as it ensures one maximises their future state pension.

“The extended deadline offers a valuable period for individuals to review their NI records thoroughly and make informed decisions without haste.

“Early action allows for financial planning flexibility, enabling individuals to spread the cost over time and avoid last-minute financial strain.”

He said given current financial pressures, being sure to maximising your state pension payment is “crucial”.

He explained: “A higher state pension provides a more robust financial base in retirement, easing the burden of increased expenses.

“This is particularly vital for coping with unexpected rises in costs related to health care, utilities, and general living expenses, ensuring a more comfortable and secure retirement.”

Chris Demetriou, co-founder of Archimedia Accounts, also called on Britons to check if they can top up, as this can be “one of the most impactful ways” to boost a person’s benefits.

He said: “I’ve seen many clients over the years increase their eventual payout by several hundred pounds annually just by addressing a few missing years.

“And with the extra costs of basic needs like food and utilities continually rising amid high inflation, even a modest pension increase provides meaningful financial protection in retirement.

“Plus, let’s be realistic – most people simply do not have room in their budgets to save enough outside of pension provisions to maintain their standard of living comfortably for 20 or 30 years after work.

“The state pension was designed to form a foundation of support, but with how expensive the cost of living has become, maximizing that amount is vital for retiree households.”

He also said people should act now to top up as it may be more expensive further down the line.

The accountant said: “Fixing gaps now through purchasing additional years will lock in today’s rates before any potential future increases.

“Promptly addressing qualifications ensures retirees have assurances around their major pension source during a time when budgeting regularly becomes far more difficult.”

For the latest personal finance news, follow us on Twitter at @ExpressMoney_.

[ad_2]

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *