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How do you qualify for the State Pension?

For men born on or after 6 April 1951 and women born on or after 6 April 1953, the State Pension changed on 6 April 2016 and is now considered to be far simpler. How much you receive is dependent upon your National Insurance (NI) record.

In order to receive the full amount from the Government you need to have 35 qualifying years by the time you reach your State Pension age (SPA). Currently the full amount if £159.55 per week until 5 April 2018.

For those with existing NI credits on their record prior to when this was introduced (6 April 2016), it’s important to note that these are not lost or discounted. Instead, when you reach SPA, the rules ensure that the amount you get will be no less under the new State Pension system than you would have received under the old basic state pension rules, provided you meet the 10 year minimum qualifying period.

Qualifying years

These can be made up by combining earnings, NI credits, self-employment and voluntary contributions.

A qualifying year can be built up if:

  • You’re employed with earnings over £157 a week  for the 2017/18 tax year, from one employer and paying NI contributions
  • You’re employed with earnings between £113 and £157 a week for the 2017/18 tax year, from one employer and are treated as having paid National Insurance contributions
  • You’re self employed and paying Class 2 NI contributions of £2.85 a week for the 2017/18 tax year
  • You make voluntary NI contributions of £14.25 a week in the 2017/18 tax year
  • You receive NI credits, such as when you claim certain working age benefits including Child Benefit for a child under 12. Read our previous article about claiming these credits here: www.armstrongwatsonfp.co.uk/blog/2017/11/child-benefit-trap-and-how-avoid-it

It’s easy to obtain a State Pension forecast online and you can check what your SPA is, get an estimate of how much State Pension you may receive and view your NI contribution history. Simply visit: https://www.gov.uk/check-state-pension

You can revisit our article from last year about obtaining a state pension forecast here: http://www.armstrongwatsonfp.co.uk/blog/2016/09/getting-your-state-pension-forecast

Once you’ve obtained your state pension forecast, it will be clear where any gaps in your entitlement exist. For many people, this represents only part of their retirement income, so it’s important to assess this alongside any funds you have accrued through a workplace pension and other pension arrangements.

Seeking professional financial planning advice could help provide you with peace of mind that your financial goals are on track, or agree what you need to do to get them on track.

Armstrong Watson Financial Planning is an independent financial adviser, authorised to provide regulated pension and retirement advice. We have a team of advisers across our office locations in Cumbria, Northumberland, Yorkshire and Scotland.

Contact us to arrange an appointment to discuss your retirement needs at your local office on 0808 144 5575 or email: help@armstrongwatson.co.uk.

 

 

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