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Could you be claiming more from your State Pension? Why the answer could be YES

It’s not easy to survive on the State Pension today. I can’t conceive having to live on the maximum £168.60 per week pension which the government currently pays to elderly citizens under current rules, yet millions of us are forced to do just that.

Finding out what benefits you can and cannot claim for is a minefield, and this means that many of us find ourselves unfairly lighter in the pocket. Fortunately, though, news emerged this week which suggests that many pensioners may be eligible for a benefit boost they may have been oblivious to.

Be aware

Following a Freedom of Information request by Royal London to the Department for Work and Pensions (DWP), it was revealed on Wednesday that some 263,000 people are topping up their State Pension by claiming the national insurance contributions of a spouse who died before reaching pensionable age.

Royal London’s pension policy director Steve Webb comments that “in principle, as long as the surviving spouse does not remarry, they can potentially get a higher state pension in respect of their late spouse’s contributions.”

However, it’s possible that many people eligible for this uplift are slipping through the net. The DWP, in response to Royal London’s FoI request, stated that pensioners can only benefit from their passed spouse’s contributions “[if] we become aware that they are a widow, widower, or surviving civil partner.”

The onus is on individuals, then, to make the government aware that they wish to receive this extra benefit.

Take charge

Irrespective of whether you can receive this extra leg-up, it’s unlikely that you’ll be able to happily survive on the State Pension alone. So it’s critical that you grab the bull by the horns and start saving for your retirement.

But be warned: it’s unlikely that simply squirrelling your money away in a low-yielding cash account will protect you from pensioner poverty. Sure, a Cash ISA wrapper might put you out of reach of the taxman, but the pitiful interest rates on offer are unlikely to stop you living on the breadline.

A quick look at Moneysupermarket shows the best-paying instant access Cash ISAs to be the pathetic 1.4% products offered up by Yorkshire Building Society and Chelsea Building Society. In fact, with inflation in the UK currently sitting around the 2% mark, your money is actually losing value in real terms.

It seems obvious to me that ploughing your cash into a company pension is a much better choice, and particularly when you factor in the extra contributions your employer has to make to your money pot.

Alternatively, getting access to stock markets through either a Self-Invested Personal Pension (SIPP) or Stocks and Shares ISA is a great choice. While there’s a chance that the electric dividend growth of recent years will slow in the near term, a reflection of the toughening macroeconomic landscape, there are still many top income shares I’m confident can continue offering big dividends long into the future.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Moneysupermarket.com. 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.