This piece first appeared in the money section of the Saga website on 3 March 2010
The text here may not be identical to the published text

PAYING EXTRA NICS IS BEST INVESTMENT

Turn £626 into £169 a year for life. Or turn £351 now into £100 a year for life. That’s the deal for particular groups of people who have not paid enough National Insurance contributions to get a full state pension.

1.
Women born between 6 April 1938 and 23 October 1944
Men born between 6 April 1933 and 23 October 1939

If your state pension has been reduced because you have too few National Insurance contributions and you have a gap in any of the six years 1996/97 to 2001/02 then you have barely a month to buy back these contributions at a special low price of between £310 and £351 for each year you buy now. If your pension is reduced then each extra year you buy will boost your pension by £1.90 or £2.85 a week so the payback period is very short. Your pension cannot be boosted above £95.25 a week (which rises to £97.65 a week from April 12)

 Married women beware. Even if you fulfil these conditions you cannot buy back a year now if you paid the reduced married woman’s rate of contributions during that year or for two whole tax years afterwards.

This offer expires at midnight on 5 April 2010. So act now if it applies to you.

2.
Women born between 6 April 1948 and 5 October 1952
Men born between 6 April 1943 and 6 April 1950

If your pension is reduced because you have not paid enough contributions you can buy extra contributions for any six years from 1975/76 to 2002/03. Married women cannot buy years when they paid the reduced married woman’s rate of contributions or the two following years. You must already have at least 20 years contributions (which can include years of Home Responsibilities Protection). Buying contributions will cost £626.60 for each year. If you reach pension age from 6 April 2010 each year you buy will boost your pension by £3.25 a week up to the maximum of £97.65. If you reach pension age before that then it will boost it by £1.90 or £2.85 a week.

This offer expires six years after you reach pension age.

3.
Everyone

If you have too few National Insurance contributions to get a full state pension you can buy contributions for the years 2009/10 back to 2003/04 (or 2004/05 if you wait until after 5 April). The married woman’s restriction is the same. The costs and benefits will be the same as section 2.

More information…
…about all three ways to top up your National Insurance contributions at www.direct.gov.uk – put ‘top up National Insurance’ in the search box.

If you have not yet retired you can find out what your pension will be by getting a state pension forecast. Go to www.direct.gov.uk and put ‘state pension forecast’ in the search box.


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