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Everyone gets the state pension, right? Wrong.

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The state pension

There are plenty of things to like about the state pension. It is currently £159.55 a week; it goes up every year by the highest of the average percentage growth in wages, inflation as measured by CPI, or 2.5%. To buy the equivalent income using an annuity would cost you over £250,000. In other words, it’s worth having.

There’s a misconception that we all get the state pension automatically. In fact, to receive the full state pension you need 35 qualifying years of National insurance contribution (remember those little deductions somewhere in the depths of your payslip?).

If you’ve always worked, this isn’t likely to be a problem. Deductions are made automatically. Equally, if you’re self-employed, you’re legally obliged to make these contributions, so chances are, you’re doing it already.

The problem areas:

The issue is for those who are not receiving an income. They may not be making National Insurance contributions, and therefore may not have the same rights to a state pension. We know that historically, women have tended to have more caring responsibilities – for children or elderly relatives – and this can lead to periods where they are not earning and not making contributions.

Here are a couple of common scenarios:

Stay-at-home mothers: They have their rights to the state pension protected through credits attached to Child Benefit. However, for higher earning families who aren’t entitled to child benefit, or for mothers whose children are now too old to receive child benefit, there may be a problem.

Your first priority should be to check website here to see how many years’ contributions you have. Research from Royal London shows that mothers may have lost over £23,000 in state pension rights since 2013 because of the changes to Child Benefit.

Carers: Similar to child benefit, you can get Carer’s Credit if you’re caring for someone for at least 20 hours a week. This should help with gaps in your National Insurance record. However, it needs to be official. This page here shows what you need to be eligible. This Money Advice page also has helpful details on your entitlement to financial support from the government. 

All is not lost

As long as you find out soon enough, you can do one of two things.

  1. Rebuild your national insurance record by going back to work (easier said than done).
  2. Or you can pay extra to top up your contributions. This is vitally important – at retirement, you will have fewer options.

The good news is, it only takes a moment to check where you are with National Insurance and once you know your situation, you can do something about it.

Have a look at our Wary Women tribe for more guides, articles and top tips.

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