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Warning! You may not get your full State Pension when you retire

Most people know the State Pension doesn’t pay anywhere near enough to guarantee a comfortable retirement. The new single-tier basic State Pension paid to those retiring after April 2016 is £168.60 per week, the not-so-grand sum of £8,767.20 a year.

Just stating facts

That figure is £3,000 less than you need to cover the retirement basics. If you think that’s bad, it gets worse. Many people won’t even get anywhere near that much.

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More than half the people who have retired since April 2016 receive less because they haven’t made enough qualifying National Insurance contributions.

You need 35 years in total to get the maximum amount. If you had breaks in your career record, or contracted out, or lived overseas, you could fall short. Almost two in five pensioners get less than £150 a week, according to a Freedom of Information request from insurer Canada Life.


The State Pension is horribly complicated and many people fall short because they find the system so difficult to understand. If you’re worried, get an up-to-date state pension forecast to find out where you stand.

You can do this by contacting the Department for Work & Pensions, calling the Future Pension Centre on 0800 731 0175 or completing form BR19, available online.

Mind the gap

If you have gaps in your records then consider plugging them by paying voluntary NI contributions. You can usually go back six years. Class 3 contributions cost £15 a week, or £780 per year. However, there’s no benefit in paying voluntary NI contributions if you built up 30 years under the old system before April 2016.

Also make sure you have claimed NI credits for any periods where you were unemployed or looking after children. They should build up automatically, but mistakes do happen. You may also claim NI credits if you have been caring for parents or grandchildren as well.

While you’re at it, make sure you’ve kept in touch with all your old workplace and private pensions. The Pensions Tracing Service on 0845 6002 537 can help dig up any you’ve lost.

Start saving now!

The most important thing you can do is ditch the notion that you can happily survive on the State Pension alone, even if you qualify for the full amount. You need to start saving under your own steam as well. Starting today – not tomorrow, or some vague point in the future.

If you have a company pension with employer contributions and tax relief, that’s great, but it isn’t enough. You should also look to set up a Stocks and Shares ISA with one of the big platforms, such as Hargreaves Lansdown, Halifax or Interactive Investor, and invest as much of your annual £20,000 allowance as you can. Do not put large sums in a Cash ISA, even if that seems cosy, familiar and safe. Over the longer run, the value of your money will erode in real terms.

Instead, look to build a balanced portfolio either of individual stocks and shares or, if that’s too complicated, low-cost investment trusts or passive index tracking exchange traded funds (ETFs). Wondering which ones to pick? is jam-packed with stock and fund ideas.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.