How to check your state pension
It’s easy to assume your state pension will be ready and waiting for you by the time you retire, but thousands of people are underpaid each year. Last year alone record high state pension errors meant that more than £500m in retirement income went unclaimed.
The state pension system is complex but figuring out if you are being underpaid is essential. An error unchecked could cost you tens of thousands of pounds in your retirement.
Here, Telegraph Money reveals how to check if the Government is paying you all that you are owed.
HOW MUCH SHOULD
MY STATE PENSION BE?
Your state pension depends on when you were born and how long you paid National Insurance contributions (NICs). Men born before April 6 1951 and women before April 6 1953 receive the basic state pension. If you were born after this then you will receive the new state pension, which is higher.
If you have a track record of about 35 years of contributions, you should be entitled to a full state pension. For people under the “old” system, this is £156.20 a week, or £8,122.40 a year. For the younger retirees, this is £203.85 a week, or £10,600.20 pear year.
This may not be what’s on your state pension forecast if there are gaps in your NICs record, if you have taken a career break or worked abroad, for example. Gaps can also arise from earning a low income, not being required to pay NICs, or being self-employed and not making adequate contributions, or if you are a married woman or widow who stopped paying reduced rates of NI, sometimes called the “small stamp”, when they were phased out in 1977.
Alice Haine, of the broker Bestinvest, said HMRC had already identified several instances where people’s state pension entitlements were incorrect. “This particularly affects married women, widows, divorcees and those aged over 80. While the Government is working to resolve this, it is always wise to follow up if you feel you have not been notified of a mistake yet or suspect your case has not been identified.”
HOW TO CHECK YOUR STATE PENSION ENTITLEMENT
First, check your state pension forecast at: www.gov.uk/check-state-pension.
Check your National Insurance record for gaps here: https://www.gov. uk/check-national-insurance-record.
You can also request a printed National Insurance statement online, by phone or by post if you live abroad.
You can also write to HM Revenue and Customs to request a statement at this address: National Insurance contributions and Employers Office, HM Revenue and Customs, BX9 1AN.
I’M BEING UNDERPAID – WHAT CAN I DO?
Do not panic if you think your state pension payments are too low – you can work with the Government to fill in gaps in your NI record and boost your pension. There are two main ways to do this: paying voluntary NI contributions and claiming NI credits.
NI CONTRIBUTIONS
Check to see if paying voluntary contributions is the right route for you, as in some cases they do not always boost your payments and you could be wasting money.
If you think this could be a risk, check with the Government’s Future Pension Centre (0800 731 0175, or +44 (0)191 218 3600 from abroad).
The Centre also offers an online form for inquiries.
You can typically backdate your NI contribution history by six years, but the Government has created a one-off concession allowing you to buy back extra missed years from the 2006-07 tax year, up to 2015-16. But this window of opportunity expires on July 31.
NI CREDITS
You may also be able to claim NI credits at no cost, such as for childcare or having been on certain allowances.
People on the basic state pension may also be able to boost their payments if they are married or in a civil partnership or if their partner has died.
Ms Haine said: “The Department for Work and Pensions has a dedicated portal for people to access this information, so have the date of birth and death of the person underpaid to hand, as well as the last-known address and the full details of their spouse or civil partner.”