Daily Express

Get clued up on pensions

- By Harvey Jones

THE state pension is the bedrock of everybody’s retirement but millions have no idea what they will get or when, and risk disaster as a result.

One in four don’t know their state pension age, including 10 per cent of those aged 55 to 64, while a similar number have no idea how much income it will pay them personally, according to new research from Standard Life.

One in five 65-year-olds are in the dark even though they’re just a year away from state pension age.

Dean Butler, managing director for retail direct at Standard Life, said it is vital to know what you are due to get. “That will help you decide how much you must save under your steam to meet your expected standard of living and retire when you choose.”

Workers also need to confirm they are on course to make sufficient National Insurance (NI) contributi­ons to get the maximum state pension.

One in four don’t realise that NI contributi­ons determine how much they get, Butler said. “They could be in for a nasty shock if they discover at the last minute they are heading for a state pension shortfall.”

You need at least 10 qualifying years of NI to get any state pension at all and 35 years to get the full new state pension, paid to those retiring from April 6, 2016.

This currently pays £10,600 a year, rising to a maximum of £11,501 from next April. The state pension is not enough to live on comfortabl­y but life will be even harder if you do not get the full amount, Butler said.

You can get a forecast at Gov.uk/ check-state-pension. Otherwise fill in the BR19 form or call the Future Pension Centre on 0800 731 0175.

The state pension age is 66 but is regularly reviewed. “It is set to rise to 67 between 2026 and 2028.”

You can start drawing workplace and personal pension savings from 55, rising to 57 in 2028. “You could access them before you receive your state pension, to tide you over,” Butler said.

You may be able get NI credits towards your pension for years when you are jobless or on low earnings.

In some cases, claiming benefits can help you build and protect your NI entitlemen­t. “If you have been receiving Universal Credit, double check that you have been getting NI credits,” Butler said.

Alternativ­ely, you may be able to top up your NI record by paying voluntary contributi­ons. The deadline for filling in gaps in your NI record from April 2006 to April 2016 is April 5, 2025. After that, you can only plug gaps from 2017 onwards.

If you have retired, check you are getting the correct amount, Butler said. “Around 750,000 are not receiving the correct sum due to errors in NI records or the Department of Work and Pensions (DWP) not making adjustment­s when there’s a change in circumstan­ces.”

Those who stopped working to raise children should check they have received NI credit for those periods.

Older married women whose husbands retired from March 17, 2008, should confirm they received the correct rate based on their husband’s NI record. “If over 80 and on a low pension, check that the DWP is giving you the over-80s rate.”

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