The new full State Pension rate in the UK has been set at £230.25 per week. However, not everyone will receive this amount, as individual circumstances may affect the total payments. Factors such as gaps in National Insurance contributions, part-time or low-income work, and time spent living abroad can all contribute to a reduced pension.
In such cases, individuals may need to explore options to increase their State Pension or find alternative ways to supplement their income in retirement. According to Manchester Evening News, there are multiple pathways available to address these gaps and ensure a more secure financial future in retirement.
How to Add to Your National Insurance Record
National Insurance (NI) contributions are essential for qualifying for the State Pension. While workers usually make NI contributions, certain situations can cause gaps in your record, such as having low earnings, being unemployed without claiming benefits, or working abroad.
To receive the full State Pension, you typically need 35 qualifying years of contributions. If you have gaps in your NI record, there are ways to add more qualifying years. These include continuing to work and pay National Insurance until you reach State Pension age, receiving National Insurance credits (for reasons like low income, unemployment, or working abroad), or making voluntary contributions.
Deferring Your State Pension
Deferring your State Pension can increase your weekly payments. For each year you delay claiming it, your pension could increase by nearly 5.8%. The government explains:
Your State Pension will increase every week you delay (defer) claiming it, as long as you defer for at least nine weeks.
However, it also adds:
You cannot build up this extra State Pension if you get certain benefits. Deferring can also affect how much you can get in benefits.
Additionally, continuing to work after you reach State Pension age can help increase your income. In these cases, you generally stop paying National Insurance contributions.
Pension Credit
Pension Credit is a benefit provided by the Department for Work and Pensions (DWP) for people over State Pension age with a low income. It comes in two types: Guarantee Credit and Savings Credit.
Guarantee Credit increases your weekly income to a minimum level, while Savings Credit offers extra payments if you have some savings or income above the basic State Pension. For 2024, Guarantee Credit raises income to £227.10 per week for single individuals and £346.60 per week for couples. Savings Credit adds up to £17.30 per week for single individuals and £19.36 per week for couples.
