In the UK today, once you’ve hit the age of 65, and as long as you have met a few conditions, you’re allowed to start claiming your state pension. As the rules stand in 2020, you can start claiming your state pension as long as you’re 65 years old, although it is scheduled to rise to 67 between 2026 and 2028 and again to 68 between 2037 and 2039.
While it does increase with inflation, a full state pension is worth £175.20 per week income. Virtually, every year that you have paid your National Insurance, you have built up about £260’s of state pension. That said, every year, there are billions of pounds being lost simply because people did not realise they were entitled to claim their correct allowances.
An example, if you have services gaps where you have not paid your national insurance contributions, you can rectify them by paying voluntary contributions for any of the past six years. Below are six other ways that you can build up your state pension entitlement that you need to know about.
If you’re looking after your children, you’re entitled to credits towards your state pension. The credits are automatically added to your National Insurance account when you claim Child Benefit, so you don’t need to do anything. The problem is that most people don’t realise this, especially those that earn over the limit of £50,000 for child benefits.
Child benefits is a regular, monthly payment of £21.05 per week for your first child and £13.95 per week for any further children to help with the cost of raising a child as long as your child is under the age of 16, or under 20 and still in approved full-time education or training, you’re entitled to child benefits.
The problem is that payment is tax-free as long as neither parent earns more than £50,000 a year. For those that earn substantially higher, they often don’t apply for child benefit, and due to a problem in the system, because they have not applied for child benefit, they then don’t get the state pension credits.
Foster Carer & Grandparents
If you’re a carer or a Grandparent under the state retirement age, it’s possible you can claim an allowance for looking after children.
- For Grandparents – you must not be working, be under state pension age, be looking after a child below the age of 12, for at least 20 hours per week.
- For a Carer – you must be looking after one or more people with ill-health or disabilities, again for at least 20 hours a week. You should receive state pension credits automatically with your monthly carer’s allowance, but if you don’t, you need to apply for them, otherwise, you could be missing out.
Statutory Sick Pay, Statutory Maternity, Maternity or Adoption Pay
If you’re any in long-term illness, maternity or paternity leave, or received adoption allowances, state pension credit are awarded. If you are unable to work for more than a year because of illness or disability, you may also get credits towards the State Pension.
In this situation is depends on which benefits you are already claiming, however you may need to take action to get credits.
If you have accompanied your spouse overseas while they are engaged with the armed forces, you’re entitled to claim for state pension credits for your time away out of the UK. Remember, you can backdate this back to 1975, so it’s worth looking at.
The same applies to jury service, although it’s not possible to backdate it.
If you’re out of the work and looking for a job, you are allowed to receive pension credits towards your state pension, however, generally, they are paid as part of your job seeker allowance package. In the UK as it stands today if you’re out of full-time work, and you have paid Class 1 National Insurance contributions for the last three years, you can claim £58.90 a week if your below 24 or £74.35 if you’re over 25 years old, for a period of up to 182 days (about 6 months).
After six months, if you’re still unemployed, you’ll need to speak with your career adviser in more detail about the options available to you for long-term unemployment. If you’re out of work, but not claiming the job seekers allowance, you will not be getting the pension credits and will need to apply directly.
As it stands today, you’ll need a full 35 years of national insurance contributions and ten years to receive half a state pension. Do you know how much yours is or what you’re on track to receive? Most people don’t, and they also don’t track what allowances they can have.