State pensions are based on National Insurance contributions, with a minimum of 10 years needed to receive any amount in retirement. Under the “new” state pension rules, 35 years of contributions will be needed to receive the full amount.
The reason a person may have contracted out of the Additional State Pension in these circumstances is because National Insurance contributions could have been reduced to pay into these types of private pensions instead.
It may be difficult to remember or keep track of these pension arrangements, especially if the person involved has worked for many employers in their working lives.
However, the government provides a Pension Tracing Service which can help people find their private pension providers contact details.
It’s also possible to request a state pension forecast which will help people find out how much income they will receive, when they’ll be able to get it and how they can increase it.
A state pension may not provide a claimant with as much income as they need (or as much as they’d like) but it may be possible to boost the payments.
If a person has gaps in their National Insurance record, which in turn will mean lower state pension payments, they could pay voluntary contributions to boost their record.
Paying voluntary contributions may increase a state pension and the Future Pension Centre can be contacted for specific guidance on how it works.
Voluntary National Insurance contributions can cover gaps in a record which can be backdated by up to six years.
They will be paid through class two or class three contributions, with different circumstances affecting which one is used.
If people paying voluntary contributions are below state pension age, the class they pay will be based on their working situations.
If a person is over state pension age and is looking to fill any gaps in their record, they will only be able to pay class three contributions.
Just as with state pension forecasts, a person can check on their National Insurance history to see if they have any gaps in their record.
Published at Thu, 14 May 2020 07:01:00 +0000