Millions of over-40s may not be eligible for full basic State Pension

Insufficient contributions could mean many will miss out on the full amount.

Over six million people aged 40-65 could miss out on receiving the full basic State Pension because of an inadequate number of contribution years.

That’s according to new analysis from Partnership.

You need 30 years of National Insurance contributions or credits to qualify for the full basic State Pension, currently £113.10 per week.

Partnership found in its survey that while the average person aged 40-65 anticipates they will be in full-time employment for 37 years, 28% will have in fact worked for fewer than 30.

The table below reveals the proportion of 40-65 year olds who will have worked less than 30 years by region:

Source: Partnership

Regionally those in Wales (35%) are the most likely to have insufficient contribution years while those in London (19%) are least likely to have this problem.

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What’s behind the lack of contributions?

Partnership found the main reason behind the lack of contributions was from people taking time out to raise children (38%).

This was followed by medical issues which meant they could not work (28%) or becoming unemployed (27%).

Meanwhile taking time out to study or retrain (11%) and taking time out to look after a family member (10%) also impacted contributions.

Partnership’s research showed women (39%) were significantly more likely to face a shortfall than men (14%).

Women were more likely to take time out to raise children (58% vs. 5%), to work part time (29% vs.13%) and stop work to look after a family member (11% vs. 6%).

In addition, 16% of women said that they "did not need to work as their partner provided for them".

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National Insurance credits

People in many of the situations outlined may be entitled to National Insurance credits which count towards the State Pension.

However, some of these need to be applied for, while others are automatically accrued, so it’s easy for people to miss out.

Those who are unemployed for example but not claiming Jobseeker’s Allowance have to claim the credits by contacting their local Jobcentre.

You can see if you are eligible for National Insurance credits here.

Those who find that they may not have sufficient credits can pay voluntary National Insurance contributions to insure that they receive the full State Pension.

Impact of falling short

Andrew Megson, Managing Director of Retirement at Partnership, said when people plan their retirement finances, many assume that they will be eligible for the full State Pension.

However, the figures show almost a third will have not worked for the 30 years required and if they haven’t taken action to ensure they get the relevant credits or make voluntary contributions they face a nasty shock in retirement.

How to check if you’ll get the full basic State Pension

You can request a National Insurance statement to check if you have gaps in your National Insurance record.

The statement will tell you if you can pay voluntary contributions to fill the gaps and how much these will cost.

To get your statement you can fill out a form online, call 0300 200 3500, or write to HM Revenue and Customers, Individuals Caseworker, Benton Park View, Newcastle upon Tyne, NE98 1ZZ.

You can also use the State Pension calculator to get an estimate of how many qualifying years you have and how much State Pension you are likely to get.

Don't rely on the State Pension - take control of your pension saving with a SIPP

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