Martin Lewis: Less than six weeks left for millions to boost their state pension by £10,000s – and some can do it for free

The clip of that part of the show, and the transcript, are below. Also see our State pension boosting guide for more help.

ITV's The Martin Lewis Money Show Live Pensions Special – Tue 21 Feb 2023

From The Martin Lewis Money Show on Tuesday 21 February 2023, courtesy of ITV. All rights reserved. Watch the full episode on ITVX.

Transcript of what Martin Lewis said on the show…

Here's a direct transcript of what Martin said, though we've broken it up into sections for ease.

An urgent state pension boost is possible until 5 April

Martin Lewis: "Right. So if you're aged 45ish to 70, and actually in some cases younger, as I'll explain, an urgent state pension boost is possible.

"As discussed before, the new state pension was introduced on 6 April 2016. So this is for anybody aged under 70ish. To get it, you need 35ish qualifying national insurance years. I say 'ish', because it is just complicated. So let's go with 35ish, maybe more, maybe less in some circumstances.

"But many people are missing national insurance years – maybe because you were caring for somebody or caring for a child, or you had years abroad, or you had a low income, or you had a career break.

"Now, this is why it's so urgent. Transitional arrangements were put in place in April 2016, and they end this tax year – that is 5 April. It's about six weeks away, and that's not a long time to do something that's quite complicated.

"Until then, you can plug any gaps back to 2006 in your national insurance years. But after that, you can only go back six tax years to 2017. So there are 11 years that you will lose on 6 April the ability to buy back."

How to check if you're missing national insurance years

"So I want you to check now whether you're missing any. Let's pretend this is a touch screen. This is what you do. OK. So the first thing, this will be for people who are under state pension age. Go and check your state pension summary. You do it on Gov.uk. Just put 'state pension summary gov.uk' into a search engine. You put your details in and it will tell you whether your pension is forecast to be at the full state pension level.

"The next thing everybody should do, even if you're already at state pension age, is go and check your national insurance record on Gov.uk. And what you're looking for is something like this. A year that is not full or you haven't contributed since 2006. Let's pretend again. Oh, love it."

Check if you're due FREE national insurance credits

"Right, now before you go and buy any. Very important. You check whether you are due free credits. For example, if you were a carer, you had childcare responsibilities or an illness. You can go and check via the national insurance credits section of Gov.uk and you may get those years back without having to pay for it."

Angellica Bell (Martin's co-presenter): "Now Martin, while you're on this subject, I have a success for you from GJ: 'After watching your programme, I claimed for specified adult childcare credits as I was not going to receive a full state pension. Success. Instead of getting £171 per week state pension, I now get the full state pension of £185.15'."

Martin: "So let's just think about that. That's £700 a year, every year, maybe for 20 years. And it goes up with inflation. It is very well worth doing. That could be nearly £20,000 there that we're talking about. Is that right? Yeah, maybe. Maybe."

You can buy more years if you need them

"So. Let me move on to the next section of this. If you have a shortfall, you can buy more years. So if you can't get them free, you can buy them. Now, if your gaps are from 2006 to 2017, clearly you need to decide soon because the window is closing. If you're near state pension age, this is easy. You'll know whether or not you'll be able to make them up another way.

"If you're younger, you've got more time to plug the gaps naturally by working, or any other method, which makes it more difficult to see if it's worthwhile. Which is why I say 45, 55+... there's a 'but' coming. However, let's just do some numbers. Click – calculator. It doesn't have any numbers on it, I don't know how it works. Sorry, graphics [team].

"Look, a full voluntary national insurance year costs around £800 and adds £275 a year to your state pension. So the breakeven point is, if you live three years after your state pension age, it would be worthwhile. Or if you're already at state pension age when you're doing this, if you live three more years from that point.

"Now, as the other Martin [a viewer who shared his story in the previous segment of the show] – we Martins, we're good with our details, aren't we? As he went through, at age 66 a man will typically live for 19 more years, so £800 would get you around £5,300 at age 66. And typically a woman would typically live 21 more years, so each £800 would get you £5,800. It is very well worth doing this one."

Why it could be worth buying extra years even if you're under 45

"However, and this is where it gets more interesting. I didn't go into detail last time. I want to go into a bit more detail this time. It's important to understand national insurance years are binary. You either qualify for them or you don't. You don't get half a year. You either get nothing or you get the whole year.

"And it can be the case, if you're only a week short of a full year, you may be told, and you heard that's why they had the partial year that was cheaper, one week's worth, £15, may qualify you for a full year.

"So I think it's worth saying, and it's difficult this, if you were under 45 and you saw that you were really nearly getting the full year, even though it might be wasting money to buy it because you might earn the full number of national insurance years naturally anyway, you might want to consider doing it speculatively if it's really cheap for 2006 to 2017. Because this is your last chance. Which is why everybody should be doing those checks we talked about before. Steve, what do you think?"

Sir Steve Webb (state pensions expert): "Well, if you've paid in most of the bit for a year, and it's just a bit more to make it a full year, look at it."

Martin: "Yeah. So it's worth everybody, even if you're under 45, just having a quick look at this, because that window is closing."

Angellica: "Well Martin, I've actually got something specifically on this from Caroline: 'Just say a big thank you to Martin and the team for telling us to check our state pension forecast. I followed his advice and contacted the Future Pension Centre and was told if I made a one-off payment of £15.40, I would receive an extra £127.92 a year on my state pension'."

Martin: "No brainer, innit? Yeah. And that's the point why everybody, even if you're aged 32, you might want to check this and see if you're just short of a partial year where you didn't quite work enough."

Important: Contact the Government's Future Pension Centre BEFORE paying for any missing years

"But what's important there is the mention of the Future Pension [Centre]. I need to be really plain. See this as a call to arms, a call to action, to check out whether this applies to you. This is a complicated situation and you need bespoke help. So DO NOT act just on the information I'm giving you.

"You must always contact – and you've heard every case study that we've talked about has done it – the Government's free Future Pension Centre for bespoke calculations on whether it is worth doing for you. I would go quickly because they're going to be very busy after this programme and there is not long left."

Martin's baboon warning: two big 'buts' to consider

"But, even then, I need to give you what I call a baboon warning. There's a couple of big 'buts', right? For example, if you do this, it might diminish the amount of pension credit you're entitled to. If you do this, by getting more, it might push you into a higher tax bracket, which means the returns may not be what you've calculated.

"This is not science, to an extent. It is a little bit of art. But for the vast majority of people out there, if you have gaps in those years, especially if you're nearing retirement age, it will be worth filling them and will be very lucrative, as long as you live long enough – and statistically, the vast majority of people will do."

'Is it worth paying national insurance contributions if I won't have enough to qualify for the full state pension?'

Angellica: "Can I go to a question from Jim?"

Martin: "Sure."

Angellica: "Is it worth paying backdated national insurance contributions if you won't have enough to qualify for the full state pension?"

Martin: "Yeah, bring that calculator back up again, if you don't mind. Thank you. Look, this isn't about getting to the full state pension. This is about whether you can boost it. Now, as long as you've got the minimum number of years, which is roughly 10 years [of] national insurance contributions, that means you get a state pension. Then, each year you buy gets you £275 extra a year, which if you live long enough is worth it. So 'yes' is the basic answer, as long as you've got the minimum number of years."

'What if I don't have enough cash to pay the contributions?'

Angellica: "I want to squeeze in another question, this has come in from Mark: 'I've got my state pension forecast through. I need to pay £4,000 national insurance by April to get an additional £15 per week (get it back within five years).' But he can't pay it, right, so what can he do? And is it worth taking out a loan to get it?"

Martin: "Well, that's a painful question. I sort of wish you hadn't asked me, you've put me on the spot. If I am brutally clinical looking at the finances, the answer is yes. Look, you know, you're going to get this back within five years, but typically you're going to live 19 years, which means you're going to get back three times what you paid. Plus it's inflation-linked, and that's way more than the interest on a £4,000 loan or money transfer credit card.

"So as long as you're going to get the credit, as long as it isn't really going to hurt you, I mean, one should only ever borrow for planned, budgeted for, one-off expenditure that's an investment in your future. Well, this is as clear an investment in your future as you ever get. And it's the certainty – it's Government-backed money – it's about as high as it gets.

"So, while I'm uncomfortable answering yes, I mean, actually, the answer is yes. Let me try and offset it with another expert – Steve, are you a 'yes' as well?

Steve: "I'm equally uncomfortable, but yes. I mean, if you think about it, people often use money and get virtually no return. This is subsidised by the Government."

Martin: "A guaranteed, certified return – so as long as you can get the borrowing cheaply, well, it may well be worth getting a loan. But do check with the Future Pension Centre that it's really going to work for you first."