Published On: Sat, Aug 1st, 2020

State Pension UK: This is how women could be damaging their State Pension entitlement | Personal Finance | Finance


State Pension is a sum provided by the Department for Work and Pensions (DWP) to pensioners of an eligible age. Pensioners can expect to receive their sum of money once every four weeks to provide them with consistent financial support. To be eligible to receive State Pension, a person is required to have build up a certain number of National Insurance contributions throughout their life.

National Insurance contributions are usually gained from work, and are taken from a person’s earned income.

To be entitled to receive any amount under the new State Pension, a person must have at least 10 years of National Insurance contributions, although these do not have to be consecutive.

More National Insurance contributions will increase the likelihood of a person receiving a full State Pension sum.

This, though, could prove difficult for women, many of whom take career breaks to look after children.

READ MORE: Backto60 women in first win of State Pension age hearing

“But the mechanism that triggers this is Child benefit. And if you are in a household with a higher rate taxpayer, then of course you are not entitled to this.

“This is done at a household level. You will therefore be required to go through the entire process of claiming Child Benefit, but then end up saying you don’t want to receive the money.”

Ms Leiper highlighted that this process is often complicated, and many people do not know the rules.

She urged the DWP to look further into the issue to see whether the system could be eased for families.

This is particularly the case as women often rely more on the State Pension as a primary savings method than their male counterparts.

Ms Leiper continued: “If a woman has managed to save through a workplace or private pension, that will often be a bonus to State Pension savings.

“But it is not going to be very good if a woman hasn’t managed to get all of their National Insurance contributions, as this could damage the amount they are entitled to receive.”

For this reason, it is vital Britons check their State Pension entitlement to ensure they do not miss out unnecessarily. 

The service online provides a bigger picture into credits and allows people to identify the gaps which may exist in their record.

However, it is not the end of the road if women do identify gaps in their record, as this can be potentially rectified.

Ms Leiper concluded: “You can buy back your credits, you can invest, and close some of those gaps in your State Pension.

“Certainly, financial advisers will probably tell you to do this straight away as one of the first recommendations they make if you seek their advice.

“It is such a good benefit to have, so to try to maximise you State Pension as soon as possible is key.

“There are plenty of things you can do, once you know. But knowing in the first place and taking an active role is essential.”



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