Im­por­tant things to know about your state pen­sion

Gloucestershire Echo - - CASHING IN -

Q CAN you tell me about the state pen­sion? A YOUR state pen­sion is based on your Na­tional In­sur­ance con­tri­bu­tions (NICS) dur­ing your work­ing life (or NI cred­its re­ceived, if you have been a par­ent, a carer or low earner for ex­am­ple).

If you’ve had any ca­reer gaps, or earned be­low the qual­i­fy­ing thresh­old, you may not re­ceive your full al­lowance, re­duc­ing your in­come in later life. If this is the case, you may ben­e­fit from pay­ing vol­un­tary na­tional in­sur­ance con­tri­bu­tions to cover any gaps in your NI record to max­imise your state pen­sion.

In al­most all cases, you’ll need at least 10 years of pay­ing NICS or re­ceiv­ing Na­tional In­sur­ance cred­its to re­ceive a state pen­sion of any amount (this does not need to have been 10 years in a row).

You need 35 qual­i­fy­ing years of NICS to re­ceive a full new state pen­sion. A qual­i­fy­ing year is a fi­nan­cial year in which you’re un­der state pen­sion age for the en­tire year, and where you pay suf­fi­cient NICS, or re­ceive cred­its, to add a year to your en­ti­tle­ment.

There­fore you should find out how much you’re cur­rently fore­cast to re­ceive. This is eas­ily done on­line through the Gov­ern­ment Gate­way, or, if you pre­fer pa­per, by us­ing a BR19 ap­pli­ca­tion form.

On­line you will be told your cur­rent earned state pen­sion based on NICS paid to date and your weekly state pen­sion fore­cast based on your as­sumed NICS con­tri­bu­tions in the fu­ture. Us­ing the BR19 fore­cast form, shows sim­i­lar in­for­ma­tion. The full state pen­sion is cur­rently £168.60 per week, or £8,767.20 per year. If your fore­cast amount is al­ready at this level, you’re at the max­i­mum and you can­not top up your pen­sion fur­ther.

If you are fore­cast to re­ceive less than the full al­lowance, you can top up miss­ing years or part-years on your record of NICS, pro­vided you are still be­low state pen­sion age and were not ex­empt from pay­ing NI.

War­ren Shute is the au­thor of the best­selling per­sonal fi­nance book The Money Plan. Send your ques­tions to the­money­plan­[email protected]­ren­shute.com. Get his free money guides at war­ren­shute.com

Check what your pen­sion will pay

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