State pension warning as one in four have no idea what they’ll get and face ‘…

BBC Money Box on deferring your state pension

Incredibly, one in four don’t know their state pension age. Perhaps that’s understandable for younger people, as the retirement age is a movable feast, and is likely to rise over time. Yet 10 per cent of those aged 55 to 64 don’t know either.

Around a quarter have absolutely no idea how much income they will get from the state pension, either, according to new research from Standard Life.

Perhaps surprisingly, one in five 65-year-olds are in the dark even though they’re just a year away from state pension age.

They’re playing pot luck with their retirement as a result.

Dean Butler, managing director for retail direct at Standard Life, said it is vital to know what you are due to get from the state in later life. “That will help you decide how much you must save to meet your expected standard of living and retire at the time of your choosing.”

Workers need to confirm they are on course to make sufficient National Insurance (NI) contributions to get the maximum state pension. 

One in four don’t realise that NI contributions determine how much income they are going to get. “They could be in for a nasty shock if they only discover at the last minute that they’re heading for a state pension shortfall.”

Workers need to have made at least 10 years of NI qualifying years to get any state pension at all.

They need to have made 35 years to get the full new state pension, which is paid to those retiring from April 6, 2016.

Too many fall short without realising that their state pension income will be proportionately reduced as a result.

The new state pension currently pays a maximum of £10,600 a year, which will rise to £11,501 from next April. The state pension is not enough to live on comfortably but life in retirement will be even harder if you do not get the full amount.

You can get a state pension forecast online at Otherwise complete the BR19 application form or call the Future Pension Centre on 0800 731 0175.

State pension age is currently 66 but is regularly reviewed to make sure it is still affordable as life expectancy rises. “It is set to rise to 67 between 2026 and 2028,” Butler said.

However, you can start drawing workplace and personal pension savings from age 55 today. This will rise to 57 in 2028. “You could access these savings before you receive your state pension, to tide you over,” he added.

You may be able get NI credits towards your state pension for years when you are not employed or have low earnings. 

In some cases, claiming benefits such as jobseeker’s allowance can help you build and protect your entitlement. “If you have been receiving Universal Credit, double check you have been getting NI credits,” Butler said.

Alternatively, you may be able to top up your NI record by paying voluntary NI contributions. The deadline for filling in gaps in your NI record from April 2006 to April 2016 is April 5, 2025. After that date, you can only plug gaps from 2017 onwards. 

If you have already retired, it may still be worth checking that you are getting the correct amount, Butler said. “Around 750,000 are not receiving the correct sum due to errors in NI records or the Department of Work and Pensions (DWP) not making adjustments when there’s a change to their circumstances.”

Those who spent raising children should check they have received NI credit for periods when not working.

Older married women whose husbands retired from March 17, 2008, should confirm that they have received the correct rate based on their husband’s NI record, Butler said. “If you are over 80 and on a low pension, check that the DWP is giving you the over-80s rate.”

Andrew Tully, technical services director at Nucleus Financial said: “Remember, even if you do get the maximum state pension you should still try to build private savings of your own.”

  • Support fearless journalism
  • Read The Daily Express online, advert free
  • Get super-fast page loading

Source: Read Full Article