“I was in a scheme which was contracted out, so I am aware that this results in a smaller pension.”
DWP tells state pensioners to spend £3,000 ‘after already working for 40 years’
State pensioners have hit out after being told to spend £3,000 to boost their state pension – when they had already worked for 40 years.
One retiree wrote into the Telegraph and said: “I worked continuously from 1970 to when I retired at 55 in 2010. I therefore have over 40 years of National Insurance contributions and my state pension has been paid to me since May 2020.
“Well before this date I obtained an online state pension forecast, and was surprised that I had to make even more NI contributions to increase my pension to the maximum available to me. I was in a scheme which was contracted out, so I am aware that this results in a smaller pension.”
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The retiree, Howard, added: “After several telephone calls giving me vague answers, I was told to make the maximum of four years’ NI contributions for the years 2016 to 2020, which I did.
“I have, therefore, paid just short of £3,000 voluntarily.” He fumed: “Have I been duped into paying additional NI contributions, despite having paid in for over 40 years?
“I have 41 years of contributions, plus four years which I was told to buy – and yet my state pension is still only just over £200 per week.”
In response, Charlene Young, a personal finance expert, responded to the Telegraph reader’s query.
Ms Young advised: “I don’t have the full information, but based on what I’ve read I don’t think claiming a refund will put you in a better position.”
Buying the full years’ worth of top-ups for 2019-20 would have cost someone around £825 and could have boosted their starting pension by roughly £260 a year.
It takes around three to four years after claiming the state pension for you to “break even”.
Ms Young said: “That said, if HMRC accepted a refund request and it was going to reduce your state pension, they’d write to you to outline the reduction and ask for your permission to proceed before doing so.”