Will I get the full state pension?

I took time out of work to be a full-time mum. I’m back to work now my children are older, but I’m also now far closer to retirement than I was when they were born! Will my time out of work mean I won’t get the full state pension?

Question asked by Mrs J Douglas
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Answered by Michael Englefield

Can I get the full state pension?

People often ask if they’re entitled to the full state pension. Recent changes to the state pension – including the increase in the state pension age for men, and the alignment of the state pension age for women with that of men – and to the welfare system mean it’s also a question that has been very much in the spotlight recently.

Men born on or after April 6, 1951 and women born on or after April 6, 1953 will receive the new state pension. The new state pension is a flat-rate, single-tier pension that replaces the old state pension and its numerous tiers.

Your eligibility for the state pension is based on your National Insurance (NI) record.

How many years of NI contributions do you need for the state pension?

You’ll need 35 years of National Insurance contributions to be eligible for the full new state pension whether you’re a man or a woman, and those with fewer than 10 years of contributions won’t receive anything.

You can use this government calculator to check how much of the new state pension you’re entitled to.

What if I haven’t paid enough NI contributions to get the full state pension?

Your years of contributions don’t have to be consecutive and there are credits available for years you spend out of work. You can get National Insurance credits for reasons including being off work with an illness or disability, being unemployed and claiming benefits, and indeed for years spent raising children (or caring for other relatives, such as elderly parents or adult children with disabilities).
how do I know how much state pension I'll get?
For instance, if you receive child benefit for any children under 12 (under 17 before 2010), then you’ll have automatically been given a National Insurance credit for those years you spent caring for your children.

If you’ve used the state pension calculator and have found that you’re not entitled to the full amount, this will most likely be because of ‘gaps’ in your National Insurance record. In this case, you’ll only get a proportion of the full amount based on the number of years of qualifying National Insurance contributions you do have.

However, having gaps in your National Insurance record doesn’t automatically mean it’s impossible to get the full new state pension. You may be able to ‘top up’ your National Insurance contributions with voluntary contributions for years that you weren’t receiving credits.

You might pay voluntary NI contributions for any years you spent after 2010 not working and not claiming unemployment benefits while caring for a child over 12, for example. In this case, you may be able to pay voluntary class 3 National Insurance contributions to help plug gaps in your record. More on this can be found here.

How much is the new state pension?

In the 2016/17 tax year, it’s worth £155.65 a week. Current ‘triple lock’ legislation will see this figure rise each year by whichever is the highest of:

  • earnings – the average percentage growth in wages (in Great Britain)
  • inflation measured using the Consumer Prices Index (CPI)
  • 2.5%.

You can’t make extra contributions to get more than the full new state pension, but you can defer or postpone your state pension, which will give you a higher income when you do come to claim.

 

Higher earners and child benefit

From January 2013, families where one parent earns more than £50,000 see a gradual tapering off of their entitlement to child benefit. It is recouped through the tax system once earnings rise above this threshold until a parent earns more than £60,000, when the family becomes ineligible for child benefit.
woman claiming national insurance credits via child benefit
Many higher-earning families have opted to stop receiving child benefit to avoid having to repay it through the tax system, but this also means that they have lost the automatic National Insurance credit that came along with the benefit.

Given that it is still usually mothers who act as stay-at-home parents, it’s often women who are losing out on valuable NI contributions to their state pension. To avoid this and retain a stay-at-home parent’s National Insurance credits, those affected can claim child benefit at the ‘nil rate’ using this government form.

State pension
 
National Insurance contributions
 
New state pension
 
Child benefit
 
This information does not constitute financial or other professional advice. You should consult your professional adviser or contact us directly on 02084327333 should you require financial advice. It is important to ensure any insurance policy you take out is suitable for your needs.
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