People may be relying on this contributory benefit as their only income during their retirement years
The State Pension age is due to increase (Image: Getty )
The Department for Work and Pensions (DWP) has released the latest data, revealing that over 13 million people across the UK are currently claiming the State Pension. This benefit is available to those who have reached the eligible retirement age set by the government, which is currently 66 for both men and women, and have made a minimum of 10 years’ worth of National Insurance (NI) contributions.
However, many individuals approaching retirement may not be aware that in order to receive the full New State Pension payment of £230.25 per week, they need to have made approximately 35 years’ worth of NI contributions.
This figure is just an average, as some people may have been “contracted out” and will therefore require more NI contributions to qualify for the full amount.
While workplace and private pensions can supplement the State Pension in retirement, many people may be relying on this contributory benefit as their only income during their retirement years. Therefore, it’s crucial to understand how many years you need to make NI contributions in order to receive the maximum payout.
The State Pension age is due to increase to 67 between 2026 and 2028, with another planned rise to 68 expected to take place in the mid-2040s, according to the Daily Record.
If you’re worried about how many years you need to work, whether retirement is far off or just around the corner, the guide below should help clarify how National Insurance contributions affect the amount of State Pension you’ll receive.
How to get any New State Pension payment
To qualify for any state pension, you’ll need a minimum of 10 qualifying years on your National Insurance record, but these don’t have to be consecutive.
This implies that for at least 10 years, one or more of the following conditions applied to you:
Even if you’ve lived or worked overseas, you might still be eligible for some New State Pension.
You may also qualify if you’ve made contributions at the reduced rate for married women or widows.
How to receive full New State Pension payments
Firstly, it’s important to understand that “full” refers to the maximum amount of New State Pension a person can receive.
If you don’t have a National Insurance record prior to April 6, 2016, you’ll need approximately 35 qualifying years to get the full New State Pension – this could be more if you were “contracted out”, find out more here.
For those who have contributed between 10 and 35 years, they are entitled to a portion of the new State Pension, but not the full amount unless they purchase additional NI years.
Qualifying years if you’re working
When you’re employed, you pay National Insurance and earn a qualifying year if…
If you’re earning less than £242 a week, you might not make National Insurance contributions. However, if you earn between £123 and £242 a week from one employer, you may still earn a qualifying year – find out more here.
Qualifying years if you’re not working
National Insurance credits may be available to you if you’re unable to work due to illness or disability, if you’re a carer, or if you’re unemployed.
You can receive National Insurance credits if you meet certain criteria.
If you’re not working or receiving National Insurance credits, you might have the option to pay voluntary National Insurance contributions to boost your State Pension amount.
What happens if there are gaps in your National Insurance record?
Even with gaps in your NI record, it’s still possible to receive the full New State Pension. A State Pension statement can provide an estimate of how much State Pension you could receive.
You can also request a National Insurance statement from HM Revenue and Customs (HMRC) to check for any gaps in your record.
If gaps in your National Insurance record could prevent you from receiving the full New State Pension, there are steps you can take. You can check your National Insurance record on the GOV.UK website.
It’s also important to check your State Pension age to determine when you can retire and claim your State Pension. This can be done using the free online tool on the GOV.UK website.