Important things to know about your state pension
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
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