Five actions you can take NOW that could boost your State Pension by thousands of pounds
THERE are five simple ways you could boost your State Pension payments by thousands of pounds.
Almost half of those receiving the State Pension do not receive the full amount, according to data from pensions firm Royal London.
And, some of those receiving less than the full £203.85 a week under the new State Pension may be able to increase their payments.
Consumer champion Which? has highlighted five simple actions that could quickly boost your pension pot.
Most Brits start receiving the government-funded payments when they reach state pension age, which is currently 66.
But not everyone gets the same amount, and how much you are awarded depends on your National Insurance record.
Workers must have 35 qualifying years of National Insurance to get the maximum amount under the new State Pension.
The new State Pension is paid to those born after April 6 1951, anyone born earlier will receive their pension through the old scheme.
National Insurance qualifying years are earnt through work, or by getting credits, for instance when you are looking after children and claiming Child Benefit.
But, even if your record does not show 35 years qualifying years, you may be able to increase your payments.
Here are five ways you could boost your income:
1. Increase your qualifying years
It is possible to increase the number of qualifying years on your National Insurance record by paying voluntary Class 3 contributions.
These can be paid for up to six years following a tax year, so you would have until 5 April 2029 to make up for a missed year in 2022-2023.
If you’re considering filling in gaps through payments, first ensure that doing so will see you cross a threshold to increase your State Pension.
Payments can be made online through the Check Your Pension forecast service.
2. Claim NI credits for looking after children
Parents who receive Child Benefit while caring for a child under the age of 12 will receive Class 3 National Insurance credits.
These can be passed to grandparents as “specified adult childcare credits”.
Specified adult childcare credits can be awarded to family members who cares for a child under 12 while its parents or guardians are working.
The family member receiving the credits must be over the age of 16 and under the state pension age at the time they cared for the child.
Claimants also need to have been living in the UK.
To claim specified adult childcare credits, a parent or guardian of the child you care for must claim Child Benefit and they must countersign your application.
When you claim, the credits are transferred from the parent or carer who claims Child Benefit to the family member providing childcare.
This does not mean the parent or guardian will necessarily be worse off as if they are in work they are likely to be earning credits separately themselves.
3. Defer your state pension
If you reached state pension age on or after April 6 2016 it may be worth considering deferring payment of your State Pension.
Those born after that date can increase their pension pot for every week they defer payment, as long as payment is postponed for at least nine weeks.
The increase works out at 1% for every nine weeks, amounting 5.8% a year.
So, if you have other pensions or sources of income to rely on, you could be better off in the long term.
4. Check you have all the credits you’re entitled to
It’s important to double-check your National Insurance record to ensure that you’re receiving all the money you’re entitled to.
Which? highlighted possible errors including the large number of parents who have been underpaid as their ‘Home Responsibilities Protection’ (HRP) was not included on their records.
The consumer champion said that these and other errors have seen £594million paid to 99,558 individuals who were received less than they were due because of system errors.
5. Apply for Pension Credit
Pension Credit is designed to top up the income of the UK’s poorest pensioners.
It is currently worth up to £218.15 a week if you are single or £332.95 if you are part of a couple.
However, even if your income is higher, you might still qualify if you have a disability or caring responsibilities.
There is also another element to Pension Credit called savings credit.
To get this, you need to have saved some money towards your retirement.
With Savings Credit you can get an extra £17.01 a week for a single person or £19.04 a week for a married couple.
How does the state pension work?
AT the moment the current state pension is paid to both men and women from age 66 - but it's due to rise to 67 by 2028 and 68 by 2046.
The state pension is a recurring payment from the government most Brits start getting when they reach State Pension age.
But not everyone gets the same amount, and you are awarded depending on your National Insurance record.
For most pensioners, it forms only part of their retirement income, as they could have other pots from a workplace pension, earning and savings.
The new state pension is based on people’s National Insurance records.
Workers must have 35 qualifying years of National Insurance to get the maximum amount of the new state pension.
You earn National Insurance qualifying years through work, or by getting credits, for instance when you are looking after children and claiming child benefit.
If you have gaps, you can top up your record by paying in voluntary National Insurance contributions.
To get the old, full basic state pension, you will need 30 years of contributions or credits.
You will need at least 10 years on your NI record to get any state pension.
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