Speaking on his BBC podcast, Lewis explained that while many people focus on the widely quoted requirement of 35 qualifying years for the full new state pension, the rules are more nuanced. He also highlighted the significance of reaching the minimum qualifying threshold, which can make the difference between receiving no state pension at all and becoming entitled to weekly payments.
The comments followed a question from a listener whose relative was approaching their 40s without ever having worked, claimed benefits or built up National Insurance credits. According to MoneySavingExpert (MSE) founder Martin Lewis, understanding how NI contributions work is essential when assessing future state pension entitlement.
The Minimum Qualifying Threshold Can Make a Significant Difference
Lewis described the state pension system as having a “hard bottom and a soft top”. He explained that National Insurance contributions are generally built up through employment or by receiving certain qualifying benefits, including credits available to some parents and carers. “I think of it like a token,” Lewis said, explaining that each qualifying year adds a National Insurance credit towards a person’s state pension record.
According to MSE, many people assume they need exactly 35 qualifying years to receive the full new state pension. Lewis said that figure is only a general guide because the exact number required varies depending on an individual’s National Insurance record.
He stressed that the lower threshold is much more straightforward. “The bottom is a hard bottom, because to get any state pension, you need 10 years of National Insurance credits,” he said.
Under the current rates cited in the reports, the full new state pension is worth £241.30 a week, or around £12,550 a year. Someone who reaches the minimum 10 qualifying years could receive approximately £68.90 a week instead of receiving no state pension, provided they satisfy the eligibility rules.
Filling Gaps and Pension Credit May Provide Additional Support
According to the reports, people with gaps in their National Insurance record may be able to pay voluntary contributions to fill missing qualifying years. Lewis highlighted the example of someone who had accumulated nine qualifying years and chose to purchase one additional year.
He said that buying the extra year allowed that individual to move from having no entitlement to qualifying for around a third of the full new state pension. Lewis described this as being particularly valuable because the cost of purchasing the additional qualifying year was recovered within months after state pension payments began.
Lewis also noted that continuing to pay National Insurance does not stop once someone has secured entitlement to the full state pension if they remain in work and are below state pension age.
Lewis also highlighted Pension Credit as an option for people who reach state pension age with little or no state pension entitlement and a low income. According to his comments, the benefit tops up income to a minimum level and can also provide access to additional support, including council tax reductions, help with housing costs, assistance with NHS costs and a free TV licence for eligible claimants aged 75 and over.
