You do not automatically get the State Pension, but build entitlement during your working lifetime. Millions never bother to check how well they are progressing, and risk falling short as a result.
It is simple to find out exactly where you stand. You can check your State Pension online, via government portal Gov.uk.
If you don’t, you could be in for a shock as the retirement age looms. Nobody wants to find themselves heading for a shortfall.
To qualify for the maximum new State Pension, currently worth £185.15 a week, both men and women have to make 35 years of qualifying National Insurance contributions.
You pay mandatory NI if you’re 16 or over and are either an employee earning above £190 a week, or self-employed and making a profit of £6,725 or more a year.
The simple way to check how much entitlement you have built up is to visit the Check State Pension section of Gov.uk.
This will show you how much State Pension you could get, when you can get it and how to increase it, if that option is open to you.
First, you will have to prove your identity. You may already have done this, via the Government Gateway, a central place where you register to use online government services.
You can use the User ID and password you receive as part of the sign-up process to access lots of services, including many of HMRC’s digital services, and the State Pension.
The quickest way to get your State Pension forecast is to apply online, but you can apply by post by completing the BR19 application form. Otherwise you can call the Future Pension Centre helpline on 0800 731 0175. They will post the forecast to you.
Your forecast is not a guarantee and does not include any increase due to inflation.
Many people end up with gaps in their NI record, say, because they take time off to raise a family or care for loved ones, have an illness or disability, are unemployed, or are self-employed but not earning enough money to pay NI.
In many cases the gap will automatically be plugged with National Insurance credits, but it is always worth checking to see if that’s been done.
If you are heading for a shortfall, you may be able to pay voluntary Class 3 NI contributions to catch up, says Becky O’Connor, head of pensions and investments at Interactive Investor. “Buying voluntary NI payments costs £800.80 a year. In return, you get extra State Pension of £275.08 a year for life.”
This means you effectively get your money back in just three years. “This option is not right for everybody, but a great deal for some,” O’Connor says.
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Checking your State Pension forecast is a vital first step in retirement planning, says Stephen Lowe, director of retirement specialists Just Group. “It tells you where you stand today, and gives you an indication of how much State Pension you will get when you turn 66.”
You can use this information to plan the rest of your retirement income, Lowe says. “The new State Pension pays a maximum income of £9,627.80 a year, which is not enough to live comfortably, especially as living costs rocket.”
This means you need to build up further income in your own name, say, via a workplace pension, personal pension or your £20,000 Isa allowance. “Getting a State Pension forecast is only the start, the next step is up to you,” Lowe says.
The online State Pension forecast service is not available to those who have already started getting their State Pension, or who have delayed (known as deferred) claiming it.