Something we advise our clients to know as they get into their late 40’s is what their entitlement to the state pension will be when the time comes.
The best way to get this information is to obtain a state pension forecast. You can apply online through the Government Gateway if you have an online personal tax account or by post or telephone; details of all methods can be found at https://www.gov.uk/check-state-pension.
Having received your state pension forecast there can be confusion as to what it actually means.
It is a known fact that you need 35 qualifying years to get the full state pension…………but is it really this simple? The answer is no. This is not necessarily the case in all situations.
Your state pension forecast may state that “you cannot improve your forecast anymore” and this can be even if you do not have the full 35 qualifying years.
There is a reason for this. It will depend on your National Insurance record prior to April 2016 when the state pension was restructured.
Therefore, the question is, can you rely on the statement in the forecast that you cannot improve your entitlement despite not having 35 qualifying years? The answer is possibly yes dependent on your pre–April 2016 National Insurance position.
It is important that you are mindful of the fact that just because you do not have 35 qualifying years this does not mean that you should make voluntarily contributions to top up these years, as these may not increase your final entitlement. This will just be a waste of your hard-earned money.
If you are unsure about your position, all is not lost as you can contact the DWP to clarify the position. Alternatively in the weeks leading up to receiving your state pension you will receive details of your pension entitlement and if there are gaps you can then make voluntary contributions for the previous 6 years.
Before making any voluntary contributions, it is worth checking that you are not paying in more than you will get back and we would recommend speaking to a financial advisor.