DWP alert as people nearing retirement may not be eligible for State Pension

People in the UK have been warned they may not be entitled to a full State Pension. You need to have worked for a certain number of years and made National Insurance contributions to be eligible.

The Department for Work and Pensions (DWP) latest figures reveal that out of the 4.5 million older people currently receiving the New State Pension, more than two million (45%) do not receive the full entitlement of £230.25 per week, equating to some £11,973 for the current tax year.

As highlighted by the Daily Record, DWP data also shows that 200,721pensioners receive less than half of the full weekly payment (£230.25). This is due to the requirement of at least 35 years' worth of qualifying National Insurance Contributions (NI) to qualify for the full State Pension, with a minimum of 10 qualifying NI years needed to be eligible for any amount.

Recent research from retirement specialists at Just Group discovered that fewer than six in 10 (57%) adults of State Pension age or older knew how many years' worth of NI contributions they need to claim the full State Pension.

The study found that 13% of people over 66 said that the State Pension accounted for over 90% of their monthly household income, with 44% stating that it represented more than half of their household income.

Stephen Lowe, group communications director at Just Group, advised: "Before people claim the State Pension, we'd urge them to check if they will actually receive the full New State Pension and if not to review their NI record to see where they have gaps in their record.

"For some, it may make sense to pay extra to make the contributions voluntarily and retrospectively for the previous six tax years. The extra income over the course of a retirement may offset the initial cost of these contributions.

"For others who may have spent time out of the workforce on maternity leave or providing care for loved ones, for example, they may be eligible to claim NI credits which can help fill in gaps and build extra State Pension income for free."

National Insurance records can be topped up by paying for voluntary Class 3 National Insurance contributions, but these can only be made for the last six tax years.

However, before people start receiving the State Pension, they can claim credits to top up gaps in their NI records for various reasons such as maternity leave, unemployment, sickness or for providing caring responsibilities.

State Pension age

The State Pension age is due to begin its rise from 66 to 67 next year, with the increase expected to be fully implemented for all men and women across the UK by 2028. This planned adjustment to the official retirement age has been in legislation since 2014, with an additional State Pension age increase from 67 to 68 scheduled to take place between 2044 and 2046.

This contributory benefit offers crucial financial support to nearly 13 million older people nationwide, including over a million retirees residing in Scotland.

Many people nearing the official retirement age this year (or the next) and eligible to start claiming State Pension from the DWP, or those approaching 55 and eager to begin withdrawing from a personal or workplace pension, might not be aware of a useful checklist provided by Citizens Advice. You can access this checklist here.

Your State Pension age is the earliest age at which you can start receiving your State Pension. It may differ from the age at which you can get a workplace or personal pension.

Check your State Pension age online here.