THE state pension, worth £221.20 a week, provides a stable income for most Brits once they reach the age of 66.
However, for most pensioners, it forms only part of their retirement income, as they could have other pots from a workplace pension, earning and savings.
And not everyone gets the same state pension, and what you are awarded depends on your National Insurance record.
The full rate of the new state pension is £221.20 a week – or £11,502.40 a year.
This is what the state pays those who reach state pension age after April 6, 2016.
The full basic state pension under the old system is £169.50 per week and is paid to those who retired before April 6, 2016.
There are many avenues future pensioners can take to ensure they can top up their state pension forecast ahead of retirement and ensure they receive the full amounts.
However, it’s first important to recognise why you might not receive the full UK state pension, and we’ve explained who’s most likely to be affected below.
To receive the full new state pension, you need 35 qualifying years of National Insurance contributions or credits.
You need 30 qualifying years to qualify for the basic state pension (for those who reached the state pension age before April 6, 2016).
If you have gaps in your National Insurance record due to periods of unemployment, living abroad, or not paying NICs for other reasons, these can affect your entitlement.
IF you think you're missing National Insurance years, the first thing to do is check your State Pension forecast.
You can check this as well as the State Pension age through the government’s new ‘Check your State Pension’ tool online at www.gov.uk/check-state-pension.
The tool is also available through the HMRC app, which you can download free on the Apple App Store and Google Play Store.
You’ll need to log in using your Personal Tax Account login details. If you don’t already have an online HMRC account, you can register at gov.uk.
It shows you how much your state pension could increase by and what NI years you’ll need to buy to achieve this.
Another reason you might find you have gaps in your NI record is because you you didn’t earn enough for several years.
If you work and earn above the Primary Threshold – currently £242 a week – then you automatically start paying National Insurance and build qualifying years towards your state pension.
But, if you earn above the Lower Earnings Limit (LEL) – currently £123 per week – you would not pay NI and therefore wouldn’t get a credit.
If you earned under the limit for an extended period of time then you may have holes in your record from that time.
Working part of a year on the LEL level but working the rest on a higher wage could cause problems too.
Just because you paid some NI in a given year, doesn’t mean you paid enough NI to get a “qualifying year’” towards your state pension.
If you earned at the LEL through the year then you would get a qualifying year towards the state pension.
But if you only worked part year, then it’s more complicated.
The issue of having a “part year” could arise if you had a gap between ending one job and starting another, or if you took six months in a to go travelling and didn’t pay NI.
There are several reasons why someone may have gaps in their national insurance record.
One of them is if they took time out of the workforce to look after children.
If you didn’t claim child benefit during that time, you’ll likely have some gaps.
This is because you’re rewarded with National Insurance credits when claiming child benefit.
So, if you opted out of receiving child benefits, then you could have gaps.
However, paying to plug these holes in your record may not be necessary in this case.
Before paying for voluntary National Insurance credits, it’s worth seeing if you can backdate a claim to receive the credits for free through these benefits.
However, it’s worth noting, though, that this is not a sure thing, and child benefit payments are usually only backdated by up to three months.
BEFORE making a voluntary contribution, it is important to check if the gaps in your contributions can be filled with free NI credits.
Thousands are thought to be missing out on these NI Credits, leaving them worse off in retirement.
For example, those on certain benefits should qualify for Class 1 credits.
This includes parents with active claims for child benefit.
You can check the full list of people eligible to claim credits by visiting www.gov.uk/national-insurance-credits/eligibility.
It explains the circumstances where you’ll need to claim and when you’ll get it automatically.
The same goes for if you were unemployed and didn’t claim benefits at the time.
So, if you could have claimed Universal Credit and jobseeker’s allowance when you weren’t working but didn’t, you could fill the gaps for that period.
Again, these benefits come with National Insurance credits, so if you qualify, then see if you can backdate a claim.
Other benefits like employment and support allowance and carers allowance also provide National Insurance credits.
If you were self-employed for any period during your working life you may have gaps in your record too.
That’s if your business made small profits during that time and, therefore, you didn’t make any NI contributions.
In this case, topping up could be an easy way to fill the gaps you created in that period.
IF you aren't eligible for the full state pension, buying back missing years can be really valuable.
But earning back the years isn’t free, so your voluntary contributions come at a price.
If you fill gaps between 2006/07 and 2015/16, you’ll pay the 2022/23 rates for contributions.
It is worth £15.85 a week, which means it costs £824.20 to buy one year of contributions.
As the state pension was £185.15 per week in 2022/23, this boost would add £5.29 per week or around £275 per year.
Although you’d have to pay £8,242 (10 lots of £824.20), the annual state pension boost would be around £2,750.
Someone who was retired for 20 years would get back around £55,000 in total (before tax).
Anyone under 73 can make voluntary pension contributions, as it’s assumed everyone under this age will claim the new state pension.
If you’re below the state pension age, you can check your state pension forecast by visiting www.gov.uk/check-state-pension to determine if you’ll benefit from paying voluntary contributions.
You can also contact the Future Pension Centre by calling 0800 731 0175.
If you’ve reached state pension age, contact the Pension Service to find out if you’ll benefit from voluntary contributions.
You can contact this service in several different ways by visiting www.gov.uk/contact-pension-service.
You can usually pay voluntary contributions for the past six years.
Another key reason why you may have gaps is if you were contracted out of the state second pension (S2P) at any point.
This is the additional state pension, which is an extra amount of money you could get on top of your basic state pension if you’re a man born before April 6, 1951, or a woman born before April 6, 1953.
In exchange for giving up all or part of S2P you made lower NI contributions and received an extra boost to your workplace or personal pension instead.
Paying less NI means many people have gaps in their record, but the trade-off is that they receive an extra boost to their private pension instead.
Contracting out has since been abolished, but it is a big reason why many people find they are on track to receive less state pension than they thought.
In this case, buying extra voluntary credits may not affect the amount of state pension you end up with when you retire, though.
If, at any point in your working life, you lived or worked outside the UK, you too could benefit from topping up.
That’s because when you leave the country to travel or work abroad, you will stop paying NI.
This means that, in turn, you’ll also stop gaining contributions for your record and could end up with gaps of multiple years.
YOU won't automatically get the state pension - you need to claim it once you're eligible.
You should receive a letter explaining what to do no later than two months before you reach state pension age.
You can apply for the State Pension online by visiting www.gov.uk/get-state-pension.
You can choose to defer getting the state pension – you don’t have to take it as soon as you are eligible when you reach state pension age.
Leaving your state pension untouched can boost the amount you eventually get.
If you opt to defer your state pension, your entitlement increases by the equivalent of 1% for every five weeks you do so.
As the state system can be tricky to navigate, requesting a state pension forecast is a key part of pension planning.
This will help you understand how much you could be eligible to receive and at what age.
View your State Pension forecast by visiting www.gov.uk/check-state-pension.
