The amount of state pension one receives in retirement depends largely on how many “qualifying years” of National Insurance contributions they have
The amount of state pension one receives in retirement depends largely on how many “qualifying years” of National Insurance contributions they have. However, those that find their National Insurance record lacking may be able to make up for it using National Insurance credits.
One’s NI record generally consists of all the years they spent paying National Insurance through employment, whether that be traditional or self-employment.
But, a range of circumstances could mean that every year one was not paying National Insurance through their income could still count towards their qualifying years.
In order to receive the full new state pension, people need a minimum of 35 qualifying years of National Insurance contributions.
Those that have between 10 and 35 qualifying years will only receive a portion of their state pension income due in retirement.
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This is why claiming National Insurance credits where possible is so vital to ensure one receives every last penny they are entitled to in retirement.
National Insurance credits can also help to fill any empty gaps on one’s National Insurance record to help them qualify for other benefits.
There are two different types of credits:
- Class 1 credits
- Class 3 credits
Class 1 credits count towards a person’s state pension and help them to qualify for other benefits such as contribution-based Jobseeker’s Allowance whereas Class 3 credits only count towards state pension.
Even if a person should be receiving automatic NI credits, it’s suggested they check they are getting their credits.
This will be shown on their NI record.
There are a range of other groups that will not receive the credits automatically and will need to apply, the details of which can be found on the Gov.uk website.
This includes those who are:
Looking for work
- Ill, disabled or on sick pay
- On maternity, paternity or adoption pay
- Parents and foster carers
- On jury duty or a training course
- Wrongfully imprisoned.