State Pension provides financial support every month for around 12.6 million people across the UK, including 981,399 Scots and for some, it is their only source of income during their retirement years.
However, recent data from an Opinium Survey of 2,000 people carried out in August 2021, on behalf of Hargreaves Lansdown, discovered that over a third (36%) of people do not know how much they could expect to receive from the State Pension, including 43 per cent of women.
A quarter (26%) expected between £151-£200 a week - the current full new State Pension is worth £179.60 per week while the basic State Pension is £137.60 per week.
Recent analysis by Hargreaves Lansdown of UK Government figures show that more than 2 million older people currently receive less than £100 per week in State Pension payments.
Commenting on the findings, Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “We don’t know when we’ll get our State Pension, or how much we’ll get, which makes planning for retirement almost impossible."
She continued: “The State Pension age has been on the rise in recent years, which has either passed people by, has left them completely confused, so huge numbers of people have no idea when they might get their pension.
“Unsurprisingly more younger people are in the dark, partly because it’s such a distant prospect, and partly because some of them are likely to expect more rises in the State Pension age by the time they get there.”
However, the research also highlighted that over a quarter of people in the 45-54 age group were also confused, which is a concern as their retirement plans should be more detailed by this stage in life.
Over time, increasing numbers of people will receive more State Pension, as more people with longer work records reach retirement age. However, not everyone will be able to accumulate the 35 years’ worth of National Insurance (NI) contributions needed for the full State Pension, and any periods of contracting out will also impact the amount received so people will still slip through the net.
Helen added: “If you don’t know what State Pension you are due to get, it’s vital to check it online. It’s an opportunity to discover whether there are any gaps, and to take control of your retirement planning.”
Five ways to boost your State Pension before you retire
Helen Morrissey shares her top tips to help you check your finances before and after you retire.
Check your State Pension forecast
Go online and check your State Pension entitlement on the ‘Check your State Pension forecast’ page on the GOV.UK website here. This will also tell you your State Pension age - when you can officially retire and collect the DWP benefit.
Claim Child Benefit
Women in particular miss out on valuable State Pension credits when they are at home looking after children. However, if they claim Child Benefit, they will receive NI credits that count towards their State Pension. Many women have missed out on this in the past because their husband claimed the Child Benefit rather than themselves.
Others missed out when they opted out of Child Benefit after the introduction of the High-Income Child Benefit Tax Charge. If you claim Child Benefit in your name, then you will get the NI credit towards your State Pension.
Specified Adult Childcare Credit
Are you under State Pension age and looking after a family member under the age of 12 while their parent or main carer goes back to work? If this is the case, you could qualify for NI credits under Specified Adult Childcare Credit as the working parent essentially transfers their NI credit to you.
There are other situations where you are receiving benefits and you can still claim NI credits. For example, if you are off work sick on Statutory Sick Pay. It is always worth checking to see if you may be entitled.
Buy National Insurance credits
If you can spare the cash you can plug gaps in your NI record by buying voluntary class 3 NI contributions. Buying a full extra year will cost £800, and you can typically backdate claims for six years.
Claim Pension Credit
This is something the DWP is pushing over a million pensioners to claim as they are missing out on crucial financial support and additional benefits - read more about this here.
If you are over State Pension age and on a low income then you should check whether you are eligible for Pension Credit.
Pension Credit tops up your weekly income to £177.10 if you’re single and £270.30 in joint income if you have a partner.
It can also entitle you to other benefits such as help with Council Tax payments and a free TV licence for those aged over 75.
Despite having the ability to really boost the income of the poorest pensioners, take-up of this benefit remains low with only around 60% of those entitled claiming it.
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