How you can boost your State Pension

Helen Morrissey, senior pension and retirement analyst at Hargreaves Lansdown, highlights things you can do to boost your State Pension. I take a look.

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For many, the State Pension forms the backbone of their retirement plan. So, with recent figures showing that more than 2.1 million pensioners are receiving less than £100 a week in State Pension, those nearing retirement may be rightfully concerned. But worry not. Helen Morrissey, senior pension and retirement analyst at Hargreaves Lansdown, highlights things you can do to boost your State Pension. I take a look.

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Before I continue, it’s important to note that the new State Pension rises annually by whichever is greatest of three key instruments: 2.5%, average earnings growth or inflation the triple lock. However, there are concerns that Chancellor Rishi Sunak might scrap the triple lock, which is to be confirmed on 7 September 2021.

What is the maximum State Pension 2021?

For the current tax year, 2020/21, the full new State Pension is £179.60 per week for those who reach pension age after 6 April 2016. However, if you reached pension age before 6 April 2016, the full basic State Pension is £137.60 per week.

Keep in mind that the actual amount you get depends on your National Insurance record. Building up your National Insurance contributions for 10 years helps you qualify for the new State Pension, but you will need 35 contributing years to be eligible for the full amount.

For those who reached pension age before 6 April 2016, you need a total of 30 qualifying years of National Insurance contributions or credits to get the full basic State Pension.

Why am I not getting the full new State Pension?

There are two main reasons why you might not be getting the full pension:

  1. You haven’t accumulated enough National Insurance contributions or credits
  2. You were contracted out of the State Pension

If you find yourself in either of these situations, worry not. There are ways you can increase your pension up to or above the full amount.

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How can I increase my State Pension?

It might be prudent to check your State Pension age and forecast on the gov.uk website first. This will help you understand when you’ll reach pension age and how much you could get. It’s also wise to check your National Insurance record to determine the status of your contributions.

If you find that you don’t qualify for the full pension, Helen Morrissey recommends the following four ways to boost your pot.

1. Buy National Insurance credits

If there are gaps in your National Insurance record, you can make voluntary contributions to ensure you get a full pension, if you’re eligible.

2. Claim Pension Credit

Pension credit applies to those over pension age but on a low income. However, you need to check whether you’re eligible. It caters to living and housing costs and costs arising from being a carer, severely disabled or responsible for a child or young person.

3. Claim National Insurance credits

Credits can help you fill gaps in your National Insurance record if you’re eligible. Depending on your circumstances, you may get them automatically or you may have to apply for them. Typically, you can automatically receive or apply for credits if you’re looking for work, ill, disabled or on sick, maternity, paternity or adoption pay, on working credit or a caregiver. You can get the complete list and details on the gov.uk website.

4. Claim Child Benefit

Many women fall into the category of caregivers, mainly because they are at home looking after children. To avoid missing out on a full pension, they can claim Child Benefit and receive National Insurance credits that count towards their Pension.

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