The state pension is rapidly becoming a very nice bedrock income for retirement (we dealt with the issues here). On track to be £12,000 per year, a married couple can enjoy £2,000 per month of untaxed income before needing to dip in to any other capital resources. It is not a base income we would want to live on but as a base income on which to build a lifestyle using other savings, it is great.
Unfortunately whilst most people qualify for it, not everyone is entitled to a full state pension. This can be for a variety of reasons but boils down to having years when you weren’t accruing credits towards the 35 years needed to qualify.
Everyone below state pension age should follow thislinkto request a state pension forecast. If you have already accrued 35 years in this system or you are on track to get there by the time you retire then great, rest easy.
If the forecast suggests that you have missing years, it will also give you the option of buying some of these years back. Usually the limit is six years, although you might be able to buy more if you act quickly before 6th April 2025. The department dealing with these top-ups are creaking under the strain of the amount of people logging in at the moment, but we have been told that if you at least register for a call back from this team before this date they will hold the process open for you.
The payment required to buy back each year of state pension is incredibly good value. Most people will get their entire investment back within four years of the state pension age and be in profit from then onwards until death. This could mean 20 years of profit for a man living to normal life expectancy.
