State pension warning: Gaps in your NI record could be costly to your income

Retirement expert advises people to learn about their state pension

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The state pension is a vital source of income for older people in the UK, providing nearly £10,000 per year at the maximum level. However, if people have gaps in their National Insurance (NI) record, they could find themselves receiving less cash than they hoped.

How is National Insurance linked to the state pension?

Someone’s NI record is vital as it pertains to their state pension entitlement, as it directly impacts the amount they receive.

The more qualifying years someone has on their NI record, the more state pension they can get.

Qualifying years are accumulated by paying National Insurance, usually through working.

However, it is also possible for people who are unemployed to get NI credits which contribute to their record.

These can be awarded to Britons who claim Child Benefit for a child under 12, receive Jobseeker’s Allowance, Employment and Support Allowance or Carer’s Allowance.

People usually need at least 10 years of NI contributions to get any state pension, and they might need up to 35 years to get the full state pension.

This means that gaps in someone’s NI record could cost them money in retirement.

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How to check for gaps

Fortunately, there is an easy way for people to check whether they have any gaps in their NI record which could impact their state pension entitlement.

The Government’s free online state pension forecast tool can help provide the information Britons need.

The forecast gives an estimate of how much someone will receive when they reach state pension age, and will also show if there are any gaps in their NI record.

How to fill gaps

It is possible for someone to have gaps in their NI record and still get the full state pension, provided they have the number of years required, usually 35.

However, for people who will receive less state pension due to the fact they do not have enough qualifying years, all is not lost.

These gaps may have occurred because someone was employed, but had low earnings. A person must earn over £184 per week to pay National Insurance.

Other potential reasons could be that someone was unemployed but did not claim benefits, or were self-employed and did not pay any contributions due to only making small profits.

People who have been living or working outside the UK may also not have paid NI.

It is possible for Britons to pay voluntary contributions and improve their NI record. This may in turn increase their entitlement to the state pension.

Anyone interested in doing this can contact the Future Pension Centre to find out whether they would benefit in terms of their state pension by paying voluntary contributions.

Britons can also use the Government website to check their NI record and discover how much it would cost to pay voluntary contributions.

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