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Cost of buying back NI contributions jumps 45%

The Government is poised to increase the cost of buying back missing National Insurance contributions by 45 per cent next year.

The Department for Work and Pensions announced last month that people who had taken time off work, primarily women, could buy back six extra years of National Insurance contributions, on top of the six already allowed. This would bring them closer to receiving the full basic state pension – currently £90.70 a week.

But, buried in the small print of Monday’s pre-Budget report, the Government has revealed that the cost of buying back a lost year of national insurance will rise in 2009 from £420 to £626.

National Pensioners Convention vice president Dot Gibson says: “Up to five million existing women pensioners already fail to get a full state pension because they spent years raising children, caring for relatives or working part-time. Many of these women are now living in poverty and would have found it hard enough to buy back under the old rules, let alone now the cost has risen by almost 45 per cent. The government has conned millions of older women by telling them they can buy back their lost pension, but failing to tell them exactly how much it is going to cost. Before this increase, only 1 in 10 were expected to take up the offer, but now it looks like the whole thing is unraveling. Women have a right to feel cheated.”

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