Changes to the State Pension from 6 April 2010 mean more people will qualify for it, but if you’re over 55, have recently retired or if you spend time as a carer you might need to take action now to make sure you don’t miss out on money for your future. Changes to the State Pension mean that many more people will now get the full basic State Pension.
If you’re over 55, think about your work history and any time you’ve spent out of the workplace. This might have been a career break, time taken out to raise a child or a period when you’ve been a carer for a partner, relative or friend. It is important you do this because the level of your State Pension depends on your associated National Insurance record. When you are working you pay National Insurance contributions that are deducted from your wages and these go towards your State Pension. However, you can also be credited with contributions if, for example, you have been caring for someone or claiming certain benefits, or you may have paid some voluntary contributions.
To get the full basic State Pension you need to have built up a certain number of years of contributions, called ‘qualifying years’. Currently this is 39 years for women and 44 years for men. For men and women reaching State Pension age on or after 6 April 2010, this is reducing to 30 years, to make it easier for everyone to build up a full basic State Pension.
If you think you may have a shortfall in NI contributions, there are two ways you may be able to boost your basic State Pension entitlement.
1. You might be able to buy back voluntary National Insurance contributions. These are payments you can make to plug gaps in your record, which will mean a bigger State Pension when you come to claim it. There are time limits for paying these. Normally you can fill gaps in the last six tax years provided you meet certain conditions, but if you’ve recently reached or are approaching State Pension age, you could be able to buy even more. Buying National Insurance contributions may not be the right decision for you and you should seek further information by phoning the State pension helplin e on 0800 678 1132.
2. If you’re married or in a civil partnership, check whether you can get any State Pension through your husband, wife or civil partner. At the moment you can do this if you’re a married woman with a husband who has reached State Pension age and is claiming his State Pension. Soon, married men and civil partners who have reached State Pension age will be able to do this too, providing their wife or civil partner was born on or after 6 April 1950 and has reached State Pension age. This means that husbands and female civil partners could start to qualify from 6 May 2010, and male civil partners could start to qualify from April 2015. You might also be able to get a State Pension in this way even if your husband, wife or civil partner chooses to continue working past State Pension age and delays claiming their State Pension.
If you’re a woman born on or after 6th April 1950, you will be affected by the changes to the State Pension age from 6 April 2010.
Between 6 April 2010 and 5 April 2020, the State Pension age for women is gradually rising from age 60 to 65, to match the State Pension age for men. Then from 2024 to 2046, the State Pension age for both men and women will gradually rise from 65 to 68.
What if you are taking time out of work to look after someone?
From 6 April 2010, a new National Insurance credits system means that more parents and carers will be able to qualify for the basic State Pension in the same way as if they were paying National Insurance contributions.
For parents: If you are receiving Child Benefit, you will be credited with National Insurance contributions until your youngest child reaches the age of 12, so you won’t need to apply for the new credits. But if you’re a foster carer and not receiving Child Benefit, you will need to apply in the same way you currently apply for Home Responsibilities Protection.
For carers: You might not think of yourself as a carer, but from 6 April 2010, a new Carer’s Credit is being introduced. This means that people who care for someone for at least 20 hours a week, who might not get Carer’s Allowance, won’t miss out on building up the number of qualifying years needed to get the full basic State Pension.
You can only apply for Carer’s Credit from April 2010 so you won’t need to do anything until then. If you get Carer’s Allowance, you won’t need to do anything because you should already get a credit.
Visit www.nidirect.gov.uk now to find out how the changes affect you. You’ll find easy simple steps to improving your pension, such as the State Pension Profiler tool. Alternatively, you can call 0800 678 1132.