We know that you liked the layout of the previous statements where we:
You’ll notice that this year’s Benefits Statement is longer. That’s because, from this year we are required to send you a ‘Simplified Benefit Statement’ [SBS]. We wanted to continue to send to you the information that you are used to receiving. We have included a SBS on pages 2 and 3 of the statement. The remaining pages are the Benefits Statement layout that many of you have become used to over the last couple of years.
Should you consider boosting your State Pension?
Generally, people need 35 qualifying years of full National Insurance contributions to qualify for a full State Pension. In 2023, the full State Pension is worth just over £10,600 a year.
If you’re on track for a full State Pension, you can skip this article but do please note that your circumstances might change!
If you think you’re not on track for a full State Pension, you may be able to pay extra National Insurance to top up any incomplete years. Usually, you can only fill gaps from the last six tax years, but until 5 April 2025 you can buy back any missing National Insurance years from 2006 to 2016.
There are several steps involved. The first are to check your:
We can’t give you financial advice ... and the decision will depend upon several factors, including your state of health. However, in some cases the cost of buying an additional year of State Pension is only three or four times the extra amount that would be paid out each year (from State Pension age).
If you lived any longer than three or four years after State Pension age, the cost would seem to be good value for money, as most people’s life expectancy at State Pension age is around 20 years.
Martin Lewis (founder of MoneySavingExpert) has publicised how valuable buying National Insurance years, to boost State Pension, can be. Full details, including an introductory video are available on the MoneySavingExpert website.
Remember that there are other good deals out there. If you have over 12 months’ service but are still paying 5% as an employee, you are only receiving 4% as an employer contribution. You should consider moving to a Standard Tier in the RMDCP to get more from Royal Mail. This can be done by completing a Choices form. If that’s not an option for you, you may want to elect to join the Collective Plan (rather than NEST) when Royal Mail write to you next year about your pension options.