Pension Credit: Yvonne on living on the breadline
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State pensioners on a low income could receive an extra £182 a week from the DWP to boost their pension payments. Figures from the DWP show that there are over 1.9 million people receiving less than £100 per week in state pension payments and just under 1.5 million of these are women.
Of the overall UK total, there are 10.1 million older people receiving basic state pension payments of up to £141.85 per week, compared to 2.4 million getting new state pension payments, which are worth up to £185.15 each week.
However, Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown warns at least some of those on the lowest state pension payments could be missing out on a DWP benefit worth more than £3,300 each year in financial support, discounts and other benefits.
Ms Morrissey explained: “At least some of them could be helped by applying for Pension Credit, a benefit designed to top up the income of the poorest pensioners which also acts as a gateway to other benefits such as help with NHS costs and a free TV licence for the over 75s.
“The UK Government held a Day of Action in June designed to boost awareness of this much under-claimed benefit to help more people access this extra money. We hope to see a surge in the number of claimants when the next batch of data is published.”
Ms Morrissey added: “Some of these people will have other pensions they can use to supplement their income but those who don’t face incredibly difficult times as the costs of essentials like fuel and food continue to soar.”
As many pensioners will not have ways to supplement their incomes, Emma-Lou Montgomery, associate director for Personal Investing at Fidelity International shared her top tips on how people can boost their state pension.
It tops up weekly income to £182.60 if someone is single and also tops up joint weekly income to £278.70 if they have a partner.
If someone’s income is higher, they might still be eligible for Pension Credit if they have a disability, they care for someone, they have savings or they have housing costs.
Ms Montgomery said: “Remember, you’ll need to submit your application up to four months before you reach state pension age.
“While you can do this after retiring, you’ll only be eligible for up to three months of Pension Credit in your first payment if you were eligible during that time.”
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For more information on Pension Credit, people can visit the Government website.
Check their National Insurance records/contributions
National Insurance contributions determine if and how much state pension you’re entitled to.
This is decided by the number of years people have been paying National Insurance (NI). By the time one reaches retirement age (currently 66 years’ old), they’ll have needed to have been paying for at least 10 years to receive any state pension.
To receive the full amount, people will have needed to pay National Insurance for 35 years or more, for the new state pension. People will need to pay in a total of 30 qualifying years for the full basic one.
The government’s National Insurance record offers a simple way for people to check their status and how many credits they’ve accrued so far.
How to find out how much they’re entitled to
Ms Montgomery explained that to check how much state pension someone is likely to receive, there is a helpful service – which is free – showing people a forecast of what they can expect to get in retirement.
With some of their personal details, income and employment history information, this will estimate how much state pension one could get, when they can get it, and how to increase it, if this is an option available to them.
Consider ahead of the Budget
She said: “With the Chancellor, Jeremy Hunt’s, Autumn Statement soon upon us, many will be anticipating what the latest changes and plans are for the state pension and benefits and looking for more certainty over their financial futures.
“It is now thought that the triple-lock on state pensions may remain, with benefits anticipated to rise in line with inflation.
“Going forward, a broader review of the UK pension system is required, taking into account the state pension alongside the development of the automatic enrolment regime.
“Considerations must be made towards both eligibility for automatic enrolment and how the coverage and quantum of contributions might increase in the future.”
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