- Speculation is mounting over whether the triple lock will be suspended as a predicted earnings spike could increase the State Pension by more than 8%.
- The full UK flat rate State Pension (post April 2016) is currently £179.60 per week. The full basic State Pension (pre-April 2016) is currently £137.60 per week.
- Not everyone gets the full amount, so there are millions of pensioners who receive £1001or less per week.
- There are things you can do to boost your State Pension entitlement if you do not have the necessary 35 years of National Insurance contributions (NI) to get a full State Pension.
Helen Morrissey, senior pension and retirement analyst at Hargreaves Lansdown:
“We often talk about State Pension in terms of the maximum amount of money you can receive but data shows there are still many who receive far less than this. The most recent figures from DWP show more than 2.1m pensioners are receiving less than £100 per week1 in State Pension, with women overall likely to receive less than men.
If you have other sources of income in retirement, this many not be an issue, but for many people the State Pension is the backbone of their retirement planning and they could receive a nasty shock if they find they are entitled to less than they thought. Luckily there are ways people can boost the amount of State Pension they’re likely to receive.”
Why you might not get a full State Pension
- You haven’t accumulated enough NI credits – As it currently stands you need 35 years of NI credits to qualify for a full State Pension. If you took time out of the workplace, lived abroad or you didn’t earn enough to qualify for a full NI year then you might find your State Pension entitlement affected.
- You were contracted out – Under the old state pension system (pre-April 2016) you could contract out of the Additional State Pension part of the State Pension. This meant you and your employer paid less in National Insurance contributions, so the amount of State Pension you receive will be lower but in turn your workplace or personal pension was topped up.
How you can boost your State Pension
- Go online and check your State Pension entitlement on Check your State Pension forecast – GOV.UK (www.gov.uk)This will also tell you your State Pension age.
- Claim Child Benefit – Women in particular miss out on valuable State Pension credits when they are at home looking after children. However, if they claim Child Benefit, they will receive NI credits that count towards their State Pension. Many women have missed out on this in the past because their husband claimed the Child Benefit rather than themselves. Others missed out when they opted out of Child Benefit after the introduction of the High-Income Child Benefit Tax Charge. If you claim Child Benefit in your name, then you will get the NI credit towards your State Pension.
- Specified Adult Childcare Credit – Are you under State Pension age and looking after a family member under the age of 12 while their parent or main carer goes back to work? If this is the case, you could qualify for NI credits under Specified Adult Childcare Credit as the working parent essentially transfers their NI credit to you.
- There are other situations where you are receiving benefits and you can still claim NI credits. For instance, if you are off work sick on statutory sick pay. It is always worth checking to see if you may be entitled.
- Buy NI credits – If you can spare the cash you can plug gaps in your NI record by buying voluntary class 3 NI contributions. Buying a full extra year will cost £800, and you can typically backdate claims for six years2.
- Claim Pension Credit – If you are over State Pension age and on a low income then you should check whether you are eligible for Pension Credit. Pension Credit tops up your weekly income to £177.10 if you’re single and £270.30 in joint income if you have a partner. It can also entitle you to other benefits such as help with council tax and a free TV licence for those aged over 75. Despite having the ability to really boost the income of the poorest pensioners take up of this benefit remains stubbornly low with only around 60% of those entitled claiming it3.