Women aged 53 to 60 will soon be able to pay a further six years worth of national insurance (NI) contributions to boost their state pensions.

It raises to 12 the number of extra years of contributions that can be topped up, going back to 1975.

The government’s decision is included in an amendment to the Pensions Bill currently going through Parliament.

The change is aimed at helping some women who left the workforce to raise families or care for other relatives.
The extra six years of contributions will generate extra pension of about £18 a week from 2010.

In 2010 the number of years of NI contributions needed to qualify for a full basic state pension will come down to 30 for both men and women.

Currently the number of years needed are 39 for women and 44 for men.

New weekly credits will also come in to help people caring for children or disabled people build up their contribution records in the same way as if they had been working.

People who want to take advantage of the ability to buy six extra year’s worth of contributions will have to have paid for a minimum of 20 years already.

The cost of buying those extra contributions will also go up, from the current rate of £8.10 per week.

But is it a good thing to do. Well, compared to what it would cost to buy that level of income from a private annuity, it represents some good value. But one factor you will never know is how long your going to live for.

If you die soon after retiring, any annuity represents poor value for money. But, live until your 100 and they are the best investment you are likely to make.

Still confused? A good starting point to asses you own situation is to request a free State Pension Forecast online.