Millions of Brits missing out on pension top-up payment worth up to £9000 a year – check if you’re eligible

TOP UP STATE PENSION

Currently you can claim your state pension from the age of 66. This rises to 67 by 2028.

You need 35 years’ worth of National Insurance contributions to claim the full amount of £221.20 a week (£11,500 a year).

You need ten years to get any state pension at all.

Becky O’Connor, director of public affairs at online finance platform PensionBee, says: “If you are short, you can top up your state pension by ‘buying’ years, usually only from the previous six tax years.

“The amount you should get back in extra state pension income is usually more than the cost of buying the years.”

It costs about £824 to buy a missing year. This boosts your pension by around £329 a year. Over 20 years, that’s £6,580 in extra state pension.

Find out if you have any gaps at gov.uk/check-national-insurance-record.

MAXIMISE FREE CASH

IF you have a company pension, make sure you are getting all you can from your employer.

Currently, you should contribute at least five per cent of your salary into one, while your employer must pay in a minimum of three per cent if you earn more than £10,000 a year.

But some firms allow employers to pay in more. Some will match your contributions, paying in the same amount as you contribute to your pension.

This can make a massive difference to the size of your pension over a long period.

For example, a 49-year-old earning £30,000 and starting to save eight per cent into their pension could have a pot worth £60,000 by age 67, says Aviva.

That would buy an annual income of about £2,992 if they took 25 per cent as a tax-free lump sum.

But if they boosted their contributions to a total 20 per cent of their salary, with an extra ten per cent from their employer, they could have £230,000 by age 68.

This could buy an annual income of about £11,870 after taking 25 per cent as a cash lump sum. That’s an extra £8,878 every year in retirement.

Even paying a little extra into your pension can help.

Alistair McQueen, head of ­savings and retirement at Aviva, says: “Every penny benefits from extra investment growth, extra tax relief, and maybe an extra contribution from your employer.”