Top

New State Pension: 100,000 told they won’t get a penny

The Government will write to many over 50s, telling them they won’t receive the new State Pension.

The Government is set to write to more than 100,000 people informing them they won’t receive the new State Pension.

Under new rules introduced this year, people need to rack up at least 10 years’ worth of National Insurance (NI) contributions to qualify for any pension whatsoever.

However, there are concerns that many thousands of workers are completely unaware they’ve not yet met this minimum requirement, setting them up for a nasty shock when they reach State Pension age.

Prepare for your retirement: compare self-invested pension plans (SIPPs)

Who will be contacted?

As a result, the Department of Work and Pensions has agreed to write to those at risk at some point this year.

It’s said the letter will be a one-off, so keep a close eye on your post!

Obviously there are many younger workers who’ve not yet met that threshold, so the letters are going out to those who are less than a decade from State Pension age.

What is the new State Pension?

The new State Pension was launched to replace the more convoluted two-tiered system.

While it has arguably simplified the process, there have been a lot of unintended consequences and confusion as to how much people can actually expect to receive.

So how does the new deal work? If you reached State Pension age on or after 6th April 2016, you'll receive the new single State Pension.

This is currently set at not less than £155.65 per week. But in order to receive that amount you need 35 'qualifying years' of NI contributions or National Insurance credits.

Prepare for your retirement: compare self-invested pension plans (SIPPs)

What if you have a shortfall?

If you have missing years (perhaps from raising a family, or travelling) then you won’t qualify for the full State Pension.

However, you can top up your National Insurance contributions so that you get the full entitlement. As mentioned earlier, you'll need at least 10 years to get any State Pension.

You can get a State Pension estimate from the GOV.UK website.

You can also learn more about the new State Pension with our informative guide.

You can also read all about the “new” pension freedoms here.

More retirement stories on loveMONEY:

Over 55s stung by hefty pension exit fees

Workers who retire later 'live longer'

Can cash really beat investing in the long run?

Most Recent


Comments



  • 29 June 2016

    +MDS1951: The comparison only seems to work if you are approaching retirement, since, if under the old system, you would accrue additional state pension, but only for, say 20 years, then it doesn't exceed the new state pension and is effectively wiped out. That looks like retrospectively wiping out pension entitlements to me.

    REPORT This comment has been reported.
    0

  • 23 June 2016

    With the new state pension scheme the main point is that the DWP compares what you would get under the new system with what you would have got under the old system, and gives you the greater of the two. People who were not contracted out (ie paid the full NI rate) will get the old basic state pension plus their state second pension if the total of the two is more than the £155 a week new state pension. I have an NI record of 42 years, but for most of that time I was contracted out as I was in an occupational pension scheme. This means that I won't get the new state pension of £155 but that is fair because I paid a lower NI rate for being contracted out. My basic state pension reverts to what I would have got if the old system was still running ie £119.30 a week. I also get some extra state pension - graduated pension, I think it is - which brings my weekly total up to £122 a week; I got this figure from the Government pension website, which I was able to do as I qualify for the state pension next month. Hope that helps.

    REPORT This comment has been reported.
    8

  • 23 June 2016

    What about the people who have a complete record but don't qualify for the new £155 pension purely because of age. It's madness, everybody who has met the requirements with a complete record should be treated the same.

    REPORT This comment has been reported.
    25

Do you want to comment on this article? You need to be signed in for this feature

Most Popular

Copyright © lovemoney.com All rights reserved.

 

loveMONEY.com Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FCA) with Firm Reference Number (FRN): 479153.


loveMONEY.com is a company registered in England & Wales (Company Number: 7406028) with its registered address at First Floor Ridgeland House, 15 Carfax, Horsham, West Sussex, RH12 1DY, United Kingdom.


loveMONEY.com Limited operates under the trading name of loveMONEY.com Financial Services Limited.


We operate as a credit broker for consumer credit and do not lend directly.


Our company maintains relationships with various affiliates and lenders, which we may promote within our editorial content in emails and on featured partner pages through affiliate links. Please note, that we may receive commission payments from some of the product and service providers featured on our website. In line with Consumer Duty regulations, we assess our partners to ensure they offer fair value, are transparent, and cater to the needs of all customers, including vulnerable groups. We continuously review our practices to ensure compliance with these standards.


While we make every effort to ensure the accuracy and currency of our editorial content, users should independently verify information with their chosen product or service provider. This can be done by reviewing the product landing page information and the terms and conditions associated with the product. If you are uncertain whether a product is suitable, we strongly recommend seeking advice from a regulated independent financial advisor before applying for the products.