Fewer than half of those who have retired since state-pension reforms were introduced in 2016 have qualified for the full pension introduced at the time, government data suggests. While more than one million people have begun claiming their pension over the past five years, fewer than 500,000 are receiving the maximum amount possible, which is £179.60 a week in the current year.
That largely reflects the way the state pension now works. While it is significantly more generous – this year’s weekly pension for those who retired before 2016 is £137.60 a week – it is also harder to qualify for.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The good news is that if you are off target to qualify for the maximum state pension, you may be able to do something about it. Your first step is to check your current national insurance record, via the government’s online state-pension tool. If it shows you’re likely to come up short, consider making voluntary national insurance contributions; you can usually pay these for the past six years.
At the current rate, a whole year of extra national insurance contributions will cost you around £880. At this year’s benefit rates, one year’s extra contributions would buy you around £267 of extra annual income, so you would be in the black after four years of receiving your pension.
-
HMRC warning after scammers target 170k taxpayers – how to stay protectedScammers are using increasingly sophisticated methods to trick people into sharing personal details or paying for fake self assessment tax refunds
-
Average homes in every English region are now liable for stamp duty – how much will you pay?As average house prices in every English region are now above the stamp duty threshold, we look at how much tax you will pay.
-
Why is Britain's industrial base crumbling?Opinion More and more factories in the UK are closing, and the government doesn’t seem to care. What’s going on?
-
Scotland's former first minister Nicola Sturgeon leaves behind a toxic legacyOn the left, Nicola Sturgeon is seen as something of a political hero. That makes sense… but only if you exclude her actual record in office
-
Fifty years of investment fiascos – a few examples to learn fromA benign market backdrop over the past 50 years has not prevented recurrent routs, says Max King
-
How to use SAYE and SIP schemes to multiply your moneyEmployers’ savings or share-incentive plans like SAYE and SIP schemes can help top up your pension
-
Just Group has the wind behind it – should you invest?Just Group, a retirement products provider, is well placed to profit from a growing annuity market
-
Why strong currency is the key to upward mobilityChange your social status and your life by saving money in strong currencies, says Dominic Frisby
-
Flex first, fix later: a hybrid retirement strategy to considerYou needn’t choose between income drawdown and an annuity in retirement. What is a “flex first, fix later” approach?
-
A new wealth tax is a terrible idea. The rich are already being hit by sneaky taxes – Merryn Somerset WebbOpinion Ideologues want to squeeze more tax out of the rich with a wealth tax. They’re already wrung dry, says Merryn Somerset Webb
