Planning for your retirement can never start too early, especially as fallout from the coronavirus pandemic continues to have a financial and economic impact on households and businesses across the country.
State Pension is a benefit payment which often becomes a person's main source of income during their retirement years. In 2019, data from the Department for Work and Pensions (DWP) revealed that of the 1.1 million people who claim the new State Pension, just under 500,000 (44%) receive the full amount of £179.60 a week.
The amount of State Pension people will receive depends on how long they have been making National Insurance (NI) contributions towards it.
In October 2020, the UK Government raised the State Pension age to 66 for both men and women with plans to increase this to 68 over the coming years.
But, how many years of NI contributions do you need to make in order to qualify for the full, ‘new’ State Pension?
You will need at least 10 qualifying years on your NI record to get any State Pension and they don’t have to be 10 qualifying years in a row.
This means for 10 years at least one or more of the following applied to you:
If you have lived or worked abroad you might still be able to get some new State Pension.
You might also qualify if you have paid married women’s or widow’s reduced rate contributions - find out more about this on the GOV.UK website here.
You will need 35 qualifying years to receive the new full State Pension if you do not have a NI record before 6 April 2016.
For people who have contributed between 10 and 35 years, they are entitled to a portion of the new State Pension.
Qualifying years if you are working
When you’re working you pay NI and get a qualifying year if:
You might not pay NI contributions because you’re earning less than £183 a week. You may still get a qualifying year if you earn between £120 and £183 a week from one employer.
Qualifying years if you are not working
You may get NI credits if you cannot work - for example because of illness or disability, or if you’re a carer or you’re unemployed.
You can get NI credits if you:
If you are not working or getting NI credits
You might be able to pay voluntary NI contributions if you’re not in one of these groups but want to increase your State Pension amount. Find out more on the GOV.UK website here.
What if there are gaps in your NI record?
You can have gaps in your NI record and still get the full new State Pension.
You can get a State Pension statement which will tell you how much State Pension you may get. You can then apply for a NI statement from HM Revenue and Customs (HMRC) to check if your record has gaps.
If you have gaps in your NI record that would prevent you from getting the full new State Pension, you may be able to:
Check your National Insurance record here.
Check your State Pension age
Check your State Pension age using the free Gov.uk online tool here.
This will tell you:
Get the latest money-saving and benefits news sent straight to your inbox. Sign up to our weekly Money newsletter here.