State pension warning: You could lose £275 a year by losing a National Insurance credit | Personal Finance | Finance

Workers require 35 years of National Insurance credits to qualify for the full state pension, however many do not meet this threshold as they move in and out of the workforce. These may include people who choose to become stay-at-home parents or full-time caregivers for their loved ones. On top of this, recent government plans are set up so that part-time workers will be stripped of their state pension entitlement if implemented.

Speaking exclusively to, James Andrews, Senior Personal Finance Editor at, outlined how much money people are at risk of losing when it comes to their state pension.

Mr Andrews explained: “Retiring without a single national insurance claim costs you just over £275 a year, every year of your life.

“That means that in the run-up to state retirement age it’s vital that you make sure you claim as many qualifying years as you can. To get the full state pension, you need 35 qualifying years of National Insurance contributions, and people under 10 get nothing at all.

“The first thing to do is find out where you are; you can do it online here with nothing more than a Government Gateway ID and your password. Once you know where you stand, the good news is that there are several ways to increase your contributions in the run-up to retirement.”

READ MORE: Woman, 88, cries after losing £36,000 savings, after ‘scrimping’ for 50 years

The government’s proposal to ban exclusivity causes could potentially deprive low-income workers of receiving their full state-provided retirement fund.

In practice, the policy would make such clauses inapplicable in employment contracts where the guaranteed weekly income is less than or equal to the lower income limit, which is currently £123 a week.

However, those who earn less than this threshold do not qualify for National Insurance credits.

To get a National Insurance credit, workers must earn £123 a week from a single job. Anyone earning £120 a week working two jobs at the same time gets nothing.


On this subject, Andrews said: “It sounds like good news at first – giving part-timers more flexibility and requiring bosses to pay them a certain amount if they want exclusivity – but the reality could make people lose out. .

“This change could give people a false sense of security, allowing them to earn more money by taking multiple part-time jobs, but at the cost of a much poorer retirement.”

However, the finance expert pointed out that there are things people can do to increase their state pension entitlement.

He added: “The easiest way to do this is to pay off the missing years. You can make a one-time payment to cover the remaining years through 2006 at this time.

Mr Andrews said: “Even if you don’t take the money, making sure you’re signed up for child benefit or Carer’s Allowance means you get your National Insurance credit for that year. If you are past state pension age, there are a few other routes to increase your pension fund.

“For example, due to problems with the pension system prior to 2016, several thousand elderly, widowed and divorced women were underpaid and ended up with a windfall of up to £23,000. If you are in a similar situation, it is essential to check and see if you are due a payment.

“It is also important to check that you are not owed any benefits that you are not already claiming, such as pension credit, rental assistance, heating costs, council tax reductions, or even a missing pension right from a deceased partner.

“All of this can serve to boost their pension funds.”

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