Brits nearing retirement are being issued a stark warning that their state pension may not be as much as they anticipate, with some receiving as little as £10.
With only eight months to act, it’s crucial for those approaching state pension age to review their situation urgently.
The amount of new state pension one is entitled to is contingent on the number of ‘qualifying years’ of National Insurance contributions, and alarmingly, many are discovering they fall short.
A recent report has highlighted a worrying trend: out of 3.4 million claimants last year, a mere 1.7 million received the full weekly sum of £203.85.
Shockingly, just under 150,000 got less than £100, nearly 17,000 were paid less than £20 weekly, and over 5,000 received below £10.
These figures from the Department for Work and Pensions (DWP), brought to light by Royal London, paint a grim picture, especially as their research indicates that 1 in 5 retirees rely solely on the state pension for their entire income.
Sarah Pennells, a consumer finance specialist at Royal London, cautions: “One of the main reasons why people miss out on the full State Pension is because they have gaps in their National Insurance record, but they may not realise this until it’s too late to do anything about it.”
To receive the full £221.20 new state pension, which has seen an increase since last year due to the triple lock mechanism, Brits must have paid or been credited with 35 full years of National Insurance contributions. Each of these years is referred to as a ‘qualifying year’, and the fewer you have on your National Insurance record, the less state pension you are proportionately entitled to. Your record can be checked online.
A minimum of 10 qualifying years is required to receive any portion of the state pension. If individuals discover their National Insurance record is insufficient, they are typically advised to check if they qualify for any National Insurance credits, such as when claiming certain benefits due to illness or unemployment.
Gaps in this record can often occur if you were a low-earner, unemployed and not claiming benefits, a high-earner who didn’t register for child benefit, or spent time working overseas. If you don’t qualify for National Insurance credits, you can supplement your record by making voluntary contributions to compensate for missing years.
Until April 2025, those eligible for the new state pension may be able to fill in gaps dating back to 2006. The current rate for voluntary contributions stands at £907.40 per year.
Royal London clarified that this contribution could result in a £329 increase to your annual state pension payments.
Sarah warned: “It’s crucial not to overlook this deadline of 5 April 2025. That’s the cut-off date for paying voluntary National Insurance contributions to cover any gaps between tax years April 2006 and April 2018. After that, you’ll only have a six-year window to fill in any gaps. This deadline has already been extended twice, so this could be your last opportunity. Time is running out.”
