Martin Lewis has helped a woman boost her state pension by “thousands” of pounds from a payment of just £31.
The Money Saving Expert founder previously hosted a pension special on his Money Show, where he explained that some people are “missing years” from their National Insurance records.
Gaps in a record could mean people won’t have enough years of contributions to claim a full state pension or even qualify for some benefits.
However, there is an option to make voluntary contributions to a National Insurance record if a person will benefit from doing so, which can boost pensions by thousands from a much smaller investment.
A Money Show viewer, Paula, wrote into last week’s Summer Special after following Mr Lewis’s lucrative tip to share her success.
Paula said: “We watched your pension special and then checked and found out a £31 payment would get us an extra year of pension worth thousands.”
Explaining how this savvy move would have worked, Mr Lewis said: “So £31 would be a part-year payment. Each extra year of pension is worth £300 a year. If she lives 60 years into a pension, £31 would turn into £6,000 inflation-proof.”
The payment was made as a voluntary National Insurance contribution, which Mr Lewis then described as “the biggest, single, possible money gain you can make” for people aged between 45 and 70.
He added: “It’s worth a fortune for lots of people.”
However, it should be noted that, while purchasing missing National Insurance years to plug gaps may be beneficial for some people, it may not be for others.
People can see if they’d benefit by checking their National Insurance record and state pension forecast on the GOV.UK website.
HM Revenue and Customs (HMRC) and the Department for Work and Pensions (DWP) have also launched a new online state pension forecast service to help people calculate if they’ll benefit from making voluntary contributions.