State pension: National Insurance rules mean you may not receive the full sum – check now
State pension: Expert discusses possible 'significant increase'
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State Pension payments are overseen by the Department for Work and Pensions (DWP) to ensure eligible people are receiving the amount to which they are entitled. For many, the state pension serves as a primary source of income in retirement, where living costs can often rack up. As a result, Britons will want to get the most out of their state pension to see them through the later years of their life.
It is important to note that the state pension is based on the National Insurance contributions a person makes throughout their lifetime.
For this reason, the state pension sum received by Britons is not set at a specific sum for all.
Instead, individuals can expect to receive different amounts based on their contribution levels – usually over a number of decades.
To get any state pension at all, people will usually need at least 10 qualifying years of contributions.
But for those looking to receive the full state pension sum more years will be needed.
A total of 35 qualifying years are required for individuals to receive the full state pension sum.
However, the Government has said Britons may get less than the new full state pension if they were contracted out before April 6, 2016.
Some individuals, though, may be upset to find they are not currently on track, or do not receive the full state pension amount.
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The key issue to bear in mind here is the matter of “qualifying contributions”.
Put simply, some years of National Insurance payments will not count as qualifying, and these are important to identify.
For a qualifying year, individuals will usually need to earn a minimum amount of money in order for it to be counted.
In the case of those who are employed in the current tax year, the sum is set at £120 per week, which works out as £6,240 per year.
Rules slightly differ for the self-employed who need to earn at least £125 per week, or £6,515 per year to qualify.
For this reason, then, those who work part time, are on a low income, or who have taken time out of work should pay particular attention.
Thankfully, though, this is not something which has to be left to chance and the Government’s state pension forecast tool can provide a bigger picture.
The online tool can help Britons understand how much state pension they are set to get, and when.
It can also assist in offering perspectives on how to boost this sum if at all possible.
But for those who have more than 35 years of National Insurance contributions, there is an important issue to note.
Some may believe they could get a higher amount for having more NI contributions, but this is not true.
Having more than the 35 years as outlined by the Government is not a way to boost how much someone receives.
Instead, a person will only be able to get more, potentially, if what is known as their “starting sum” under new state pension rules is higher than the maximum state pension as currently outlined by the Government.
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