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How can I increase my State Pension?

Posted on: 25 May 2016 by James Hester

Find out the four ways you can increase your State Pension.

How can I increase my State Pension?

Not everyone will get the same amount under the new State Pension, so it’s worth thinking about whether you might be able to raise what you get.

From 6 April 2016, the full amount of the new State Pension is £155.65 a week. What you get will depend on your National Insurance (NI) record.

So what can you do to get more out of the new State Pension? There are four main ways to increase your State Pension.

 

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Keep paying NI

If your starting amount is less than the full amount (£155.65 a week) your State Pension amount will keep rising as long as you continue working and paying NI contributions until you reach State Pension age.

Until 2018 women’s State Pension age is rising to 65 and by 2020 both men and women’s State Pension age will be increasing to 66. By 2028 both men and women’s State Pension age will be increasing to 67. Find out when you reach State Pension age.

Paying National Insurance (NI) contributions means you qualify for certain benefits, including the State Pension. Under the new rules every year you contribute enough NI you’ll add around £4.45 a week onto your State Pension until you reach the full amount.

You can build qualifying years that count towards your State Pension if you continue working and paying NI contributions until you reach State Pension age or the full amount of new State Pension. If you earn between £112 and £155 a week in 2016/17 you will not actually pay NI but will still build qualifying years.

 

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Apply for NI credits

Another way to increase your State Pension is by seeing if you are eligible for National Insurance (NI) credits, which can fill gaps in your NI record. The credits may increase the amount of new State Pension you get when you reach State Pension age.

If you are unable to work, or do not earn enough to pay or be treated as paying contributions, you might be entitled to NI credits. You can get credits to cover a number of different circumstances for instance, if you are caring for children or grandchildren, caring for adults, are too ill to work or are looking for work.

You can visit this link to see if you are eligible for National Insurance credits.

 

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Pay voluntary NI contributions

You can also fill gaps in your NI record by paying voluntary contributions. You may get gaps in your record if you don't pay NI or don’t get NI credits. This could be because you’re unemployed but don’t get any benefits.

You can usually only pay for gaps in your NI record from the past six years. Find out if you are eligible.

 

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Defer your State Pension

You may also build up extra entitlement if you choose to delay claiming your new State Pension when you reach State Pension age.

Your State Pension will automatically be deferred unless you begin claiming it. As a general rule, you can get higher weekly new State Pension payments if you delay your claim for at least nine weeks. Your State Pension will increase by 1% for every nine weeks you put off claiming it, which works out at an extra 5.8% for every year you defer your claim. Not everyone will benefit from deferring so check here for further information:

Find out about deferring your State Pension.

 

Further Information

You can find out more about the State Pension at www.gov.uk/yourstatepension and www.youtube.com/pensiontube

 

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Phrase of the week

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Week starting Monday 23 May 2016

Qualifying year

A complete tax year during a person’s working life in which they paid, were treated as having paid or were credited with National Insurance contributions on earnings above the weekly ‘Lower Earnings Limit’ (£112 a week in 2016 to 2017).