Full State Pension explained – how many years you have to work to receive full amount

Retirement can seem like a long way away for many of us, but planning for it is something you can never start too early. During lockdown, the UK workforce saw 11.7 million people put on furlough leave, at a cost of a staggering £ 70 billion.

The economy is now beginning to recover from that period, but a recent survey of 1,000 people carried out by Opinium on behalf of Hargreaves Lansdown found that over one-third (34%) of people aged 45-54 have no plan in place for their remaining working years.

This compares to roughly a quarter of 35-to-44-year-olds and 25-34-year-olds who had no plan for the time between age 50 and retirement. Some 42 per cent of those in the 45-54 age group said they planned to continue in their current job and work full-time, the Daily Record reports.

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A further 10 per cent said they would stay in the same role but move to part-time hours. Only five per cent said they planned to stop work completely.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “These findings point to a worrying lack of planning among those closest to retirement on how they plan to spend their remaining working years. The pandemic may well have played a part in this with the economic upheaval potentially causing chaos for people’s retirement planning with many older workers retiring early after being made redundant.

“There’s also the chance that the investment market volatility we saw earlier in the pandemic has had an impact on people’s pensions causing them to put off their plans for retirement a while longer.”

She added: “Easing into retirement by working part time is often a better way of managing such a huge change from a financial and emotional wellbeing perspective.”

While this is encouraging for those with a workplace or private pension, for many who opted out, or didn’t meet the £ 10,000 minimum requirement for auto-enrollment, a State Pension may be their best option for a retirement income.

However eligibility is not automatic. State Pension is a contributory payment and In 2019, data from the Department for Work and Pensions (DWP) revealed that of the 1.1 million people who claim the new State Pension, just under 500,000 (44%) receive the full amount of £ 179.60 a week.

The amount of State Pension people will receive depends on how long they have been making National Insurance (NI) contributions towards it.

In October 2020, the UK Government raised the State Pension age to 66 for both men and women with plans to increase this to 68 over the coming years. You will need at least 10 qualifying years on your NI record to get any State Pension, but they don’t have to be 10 qualifying years in a row.

This means for 10 years at least one or more of the following applied to you:
  • you were working and paid NI contributions
  • you were getting NI credits for example if you were unemployed, ill, a parent or a carer
  • you were paying voluntary NI contributions

If you have lived or worked abroad you might still be able to get some new State Pension. You might also qualify if you have paid married women’s or widow’s reduced rate contributions – find out more about this on the GOV.UK website here.

You will need 35 qualifying years to receive the new full State Pension if you do not have a NI record before April 6 2016.

For people who have contributed between 10 and 35 years, they are entitled to a portion of the new State Pension.

When you’re working you pay NI and get a qualifying year if:
  • you’re employed and earning over £ 183 a week from one employer
  • you’re self-employed and paying NI contributions

You might not pay NI contributions because you’re earning less than £ 183 a week. You may still get a qualifying year if you earn between £ 120 and £ 183 a week from one employer.

You may get NI credits if you cannot work – for example because of illness or disability, or if you’re a carer or you’re unemployed.

You can get NI credits if you:
  • claim Child Benefit for a child under 12 (or under 16 before 2010)
  • get Jobseeker’s Allowance or Employment and Support Allowance
  • receive Carer’s Allowance
If you are not working or getting NI credits

You might be able to pay voluntary NI contributions if you’re not in one of these groups but want to increase your State Pension amount. You can find out more on the GOV.UK website.

What if there are gaps in your NI record?

You can have gaps in your NI record and still get the full new State Pension.

You can get a State Pension statement which will tell you how much State Pension you may get. You can then apply for a NI statement from HM Revenue and Customs (HMRC) to check if your record has gaps.

If you have gaps in your NI record that would prevent you from getting the full new State Pension, you may be able to:
  • get NI credits
  • make voluntary NI contributions

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