Full state pension during retirement means you have to work that many years

Planning for your retirement can never start too soon, especially after the UK workforce experienced an unprecedented period of uncertainty during 18 months of lockdown, which saw 11.7 million furloughed of employees.

Now that the economy and industrial sectors are rebounding, a recent survey of 1,000 people carried out by Opinium on behalf of Hargreaves Lansdown found that more than a third (34%) of workers aged 45-54 do not have no plans in place for their remaining working years.

This compares to about a quarter of 35-44 year olds and 25-34 year olds who had no plans for the period between age 50 and retirement.

Some 42% of people aged 45 to 54 said they planned to continue in their current job and work full time.

A further 10% said they would keep the same job but move to part-time hours – only 5% said they planned to stop working altogether.

Commenting on the research, Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “These findings indicate a worrying lack of planning among those closest to retirement about how they plan to spend their years. remaining work.

“The pandemic may well have played a role in this, with economic dislocation potentially causing chaos in people’s retirement planning, with many older workers retiring early after being made redundant.”

She continued: “It’s also possible that the volatility in the investment market that we saw earlier in the pandemic has had an impact on people’s pensions, causing them to put off their retirement plans for a bit longer.

“Retiring working part-time is often a better way to handle such a huge change from a financial and emotional well-being perspective.

While this is encouraging for those with a work or private pension, for many who have retired or have not reached the minimum £10,000 requirement for automatic enrollment, a state pension may be their best option for retirement income, but eligibility is not automatic.

The 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 applying for the new state pension, just under 500 000 (44%) receive the full amount of £185.15 each. the week.

The amount of state pension people will receive depends on how long they have contributed to National Insurance (NI).

The legal retirement age for men and women is now 66.

In October 2020, the British government raised the retirement age to 66 for both men and women with plans to raise it to 68 in coming years.

But, how many years of NI contributions do you need to make to qualify for the “new” full state pension?

You will need at least 10 years of qualification on your NI record to get a state pension and they don’t need to be 10 consecutive qualifying years.

This means that for 10 years, at least one of the following applies to you:

If you have lived or worked abroad, you may still be able to get a new state pension.

You may also be eligible if you have paid reduced rate dues for married women or widows – find out about this on the GOV.UK website here.

You will need 35 years of qualification to receive the new full state pension if you do not have an NI record before April 6, 2016.

For people who contributed between the ages of 10 and 35, they are entitled to part of the new state pension.

Qualifying years if you work

When you work, you pay NI and benefit from a qualifying year if:

You may not pay NI dues because you earn less than £190 a week. You can still get a qualifying year if you earn between £123 and £190 a week with an employer.

Qualifying years if you are not working

You can get NI credits if you cannot work – for example due to illness or disability, or if you are a carer or are unemployed.

You can earn NI credits if you:

  • apply for family allowances for a child under 12 (or under 16 before 2010)

  • get Jobseeker’s Allowance or Employment and Support Allowance

  • receive childcare allowance

If you don’t work or earn NI credits

You may be able to pay voluntary NI contributions if you are not in one of these groups but want to increase the amount of your state pension. Learn more about the GOV.UK website here.

What if there are gaps in your NI record?

You can have gaps in your NI file and still get the new full state pension.

You can get a State pension statement which will tell you how much state pension you can get. You can then request an NI declaration from HM Revenue and Customs (HMRC) to check if your file has any gaps.

If you have gaps in your NI record that would prevent you from getting the new full state pension, you may be able to:

Check your national insurance record here.

Check your state pension age

Check your state pension age using the free Gov.uk online tool here.

This will tell you:

  • when you reach the legal retirement age
  • your age of eligibility for the pension credit

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