If someone has a shortfall on their National Insurance record, it can affect the amount of state pension they receive.
On BBC’s Morning Live, financial expert Laura Pomfret warned Britons that National Insurance is an “all or nothing situation”.
Britons may find that they are missing out on thousands of pounds each year, due to tens or hundreds of pounds.
She said: “The big tip is, you could go and look and you might find a year would be £20 because you’ve paid it nearly all that year but you just didn’t quite tip over.
“It’s an all-or-nothing situation with National Insurance, so imagine if you could pay £20 and get access to that extra £275.”
A full National Insurance year usually costs £824 and adds up to £275 each year to your pre-tax state pension.
It’s worth getting this maximum gain as long as someone lives at least three years after getting their pension (or three years after they top up, if they’re already getting it).
Britons can’t pay to increase their state pension beyond the maximum of £203.85 a week, so if someone is projected to get £200 a week or more, topping up is less good value for money.
To secure the full new state pension, Britons typically need 35 qualifying years on their National Insurance record.
To get the full basic state pension, people need a total of 30 qualifying years of National Insurance contributions or credits.
They need a minimum of 10 qualifying years to get any state pension at all.
Some people could therefore be shocked to find although they paid National Insurance in a given year, they did not earn a qualifying year.
Just because someone has paid their National Insurance, it does not automatically mean they have earned a qualifying year, there are set criteria to take into account.
For Class 1 NICs (those payable by employees) Britons need to earn £123 per week, or £6,396 per year to secure a qualifying year.
For the self-employed, this is £129 per week, £560 a month or £6,725 a year.
Britons who are on a lower income or work part-time may also be at risk.
Those who have a fluctuating income could also risk falling short in some tax years they have worked.
The full amount of state pension this tax year is worth £203.85 a week or £10,600.20 a year.
To ensure people can receive the full amount, they are urged to check their National Insurance record to check their qualifying years.
Ms Pomfret continued: “Another really helpful point is you might be entitled to National Insurance credits.
“So if you’re on employment benefits, carers allowance, if you are on maternity leave, there are lots of reasons why you should qualify without having to pay.”
Morning Live will continue tomorrow on BBC One at 9:15am.
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