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Don't lose out on your State Pension

image3 jan2021

Because of the steady stream of changes to the age at which you qualify for a State Pension, it can be difficult keeping track of your entitlement. The State Pension for women has been brought into line with that for men. In October the State Pension age rose to 66 for both men and women. There are also further increases to age 67 between 2026 and 2028.

But it is not just the age at which you qualify for your State Pension that might concern you, but the amount to which you will be entitled.

National Insurance credits

The amount of State Pension you receive is determined by the National Insurance contributions you made during your lifetime. To qualify for any State Pension at all, you need to have paid a minimum of ten years’ contributions. To receive the maximum amount of State Pension – which is currently £175.20 – you will need to have made those National Insurance contributions for a total of 35 years.

Each National Insurance credit works out to be worth £250 a year in terms of the State Pension you receive.

Many people might be losing out on the amount of State Pension which they are entitled to warned the Express newspaper in November. This is because they hadn’t claimed National Insurance credits which have been granted during times when they were not in full-time employment.

The circumstances under which such credits may be granted are many and complicated – so, it is hardly surprising that many people may be uncertain about their entitlement. Although the government website details all of the circumstances in which National Insurance credits are granted, the article in the Express newspaper highlights the following, most common, in particular:

  • some parents may have decided to waive their entitlement to Child Benefit payments, for example, to avoid incurring tax on the benefits (if one of the parents earns more than £50,099 a year, explained the Daily Record on the 5th of October);
  • even though you might not be receiving Child Benefit payments, however, you still need to complete a claim for the National Insurance credits which continue to apply – if you do not, you may be undermining your entitlement to a full State Pension;
  • if you are not the higher-earning parent in respect of Child Benefit payments, make sure you do not miss out on the National Insurance credits to which you are still entitled;
  • a final area where people may be missing out on a full State Pension is if they have given up full-time employment to care for someone else;
  • if you are caring for another person for at least 35 hours a week – in itself no small burden – and are also in receipt of Carer’s Allowance – you are also awarded National Insurance credits for that time;
  • according to the Express article, the Department for Work and Pensions estimates that although around 100,000 people could be claiming such credits, only between 10,000 and 15,000 are currently doing so.

In short, therefore, it is worth checking now – by using the government’s forecast service – how much State Pension you are likely to receive and whether this includes the National Insurance credits to which you are entitled.

This data is correct as at the time of writing. 

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