State pension ‘mistake’ which could damage your retirement – simple check available online

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Many people hope to use the state pension as the foundation of their retirement, but making the simple mistake of assuming how much they will get could derail their plans. Britons have been warned that they must keep track of their National insurance record to avoid disappointment.

PensionBee CEO, Romi Savova, explained how National Insurance (NI) plays a crucial role in Britons’ state pension entitlement.

She said: “The state pension can be used alongside personal and workplace pension savings to finance one’s retirement, but not everyone is entitled to the same amount of financial support from the Government.

“A saver’s eligibility is determined by the amount they have paid in National Insurance contributions, so it’s vital for savers to check their National Insurance record ahead of their desired retirement date.

“Currently, a saver will need to have paid National Insurance contributions for at least 10 years to qualify for the basic state pension of £137.60 per week (2021/22).

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However, those who are unemployed can also earn qualifying years via NI credits, which may be awarded to people receiving certain benefits.

These include Jobseeker’s Allowance, Employment Support Allowance (ESA), Carer’s Allowance and Child Benefit.

It is crucial people are aware of the state of their NI record, as any gaps could reduce the amount of state pension they get later in life.

People who are concerned about gaps in their record may be able to fill them by making voluntary contributions and thus increase their state pension entitlement.

Ms Savova continued: “One of the worst mistakes a saver can make is to overestimate the value of their state pension as it could force them into a difficult position in later life, where they have to delay their retirement or worse, return to work.

“Once a saver has a clear idea of how much Government support they are entitled to, the next step is to get an understanding of the value of any personal and/or workplace pension savings they may have accrued during their working life.

“From there they can set themselves a retirement income goal and adjust their contributions accordingly as they approach retirement.”

Ms Savova also warned that even the full state pension might not be sufficient to sustain people in retirement.

She said: “It is a common misconception that the state pension is adequate enough to make up for shortfalls in personal pension saving.

“In reality, the full state pension currently pays an annual income of just £9,339, which isn’t usually enough for a comfortable retirement.

“Most importantly, this is only accessible from the age of 66, rising to 67 by 2028.”

Britons can check their National Insurance record on the Government website to ensure they are on course to secure the maximum state pension available to them.



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