The typical pensioner lives for 20 years after retiring. For those who do, that original £800.80 investment could generate around £7,653 in total extra State Pension.
Again, this assumes the State Pension grows by 2.5 percent a year on average over that period.
Lowe said this is not right for everyone. It all rests on how long you live after drawing your state pension. “Those who die a year or two into retirement could get less back than they put in, so think twice if in poor health.”
Buying extra years could backfire if you lose out on means-tested state benefits as a result, particularly Pension Credit, which increases a single pensioner’s income to £182.60 a week or £278.70 a week for couples.
If you are likely to amass 35 years of NI contributions by the time you retire, again, this option isn’t for you.
That’s because you cannot buy MORE than the maximum new State Pension.
You can usually only make voluntary NI payments for gaps in the previous six years, although the Department for Work & Pensions (DWP) has temporarily extended this period.
Visit Gov.uk to check your NI record, see if you are eligible to make voluntary contributions, and how much it will cost. Or contact the Future Pension Centre at on 0800 731 0175.
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