The incentive is to help you qualify or improve your entitlement to the basic state pension, but as the price of contributions isn't the only thing changing, this can seem complicated. At present, women retiring before April need 39 years worth of NI contributions to qualify for a full basic state pension, while men need 44 years.
However, this drops to 30 years for everyone retiring after April In particular, younger people who have many years of their working lives to go, and married women, may see little or no benefit. Robin Williamson, technical director of the Low Incomes Tax Reform Group, says that those on lower incomes, who fall into the means-tested benefits trap, could be throwing money away by paying voluntary contributions because doing so will simply mean they scrap their entitlement to the equivalent state benefits, such as pension credit.
Currently, men need 11 years of contributions and women 10 to qualify for any state pension at all, but this will be slashed to just one year from April You can only buy up to six missing years. However, in October last year, new proposals were announced for an extra six years on top of this, heralded as a victory for women who have taken time out to care for children or relatives.
This only applies to those who reach state pension age between 6 April and 5 April , who already have 20 qualifying years, taking account of Home Responsibilities Protection credits paid when child benefit is received, or if you are caring for someone sick or disabled.
Women are not permitted to buy back missing years for the years they elected to pay the reduced rate married woman's stamp. If you have reached state pension age, and are not entitled to a full basic state pension, you are still allowed to buy back years as far back as but not for the year of your retirement. Get a forecast from the Pension Service by completing form BR19 at thepensionservice.
Where both spouses have a full contribution record, both receive the full pension. The problem came to light when Cash took the department to task after readers told us they were having problems. A Cash reader, Tim Cornish, had been incorrectly informed by call centre staff that it was not possible to buy added years at present as rates had not been set.
In fact, this was possible for certain years. Cornish, a management consultant, has been trying to help his wife buy added years since the start of December. He has variously been told that added years could not be bought, could be bought, the rates had not been set and that he should speak to the other government department.
It was only after Cash became involved that a special DWP adviser started looking at Mrs Cornish's case and began mentioning that she might have clocked up four more years than she realises through national insurance contribution credits she would have received under the Home Responsibilities Protection scheme when she was bringing up their family.
Although he appreciates the help of the DWP adviser, the delay continues. Ten weeks after he started speaking to the government departments about her case, Cornish is still awaiting clarification on what his wife could pay in the form of added years, what this would cost her and what exactly her contribution record was.