A LITTLE-known State Pension loophole could help millions of pensioners.
The benefit is usually paid into bank accounts every four weeks and is worth up to £885 a month.
However, many retirees might be unaware that you can actually request to have this money deposited into their account more frequently.
The Department for Work and Pensions (DWP) has the resources to pay you on a weekly basis instead.
This could be a useful alternative for those who need to pay off their bills at different points each month.
If you want to change how you’re paid the State Pension, you’ll need to get in touch with the Pension Service.
You can do this by calling 0800 731 0469.
You can also write to the Pensions Service and ask for your payments to be paid on a weekly basis.
You’ll need to send a letter to The Pension Service, Post Handling Site A, Wolverhampton, WV98 1AF.
If you’re eligible for the full new State Pension this means you’ll be paid £221.20 each week instead of £885 a month.
If you’re close to qualifying for the State Pension and are ready to apply for it, you can also state how you want to be paid in your application.
In the information box of your claim form, write that you wish to receive payments weekly.
Remember, the exact amount you’ll get each week will depend on your National Insurance record.
NATIONAL INSURANE AND THE STATE PENSION
NATIONAL Insurance is a tax on your earnings, or profits if you're self-employed.
These contributions make you eligible for things like the State Pension and certain benefits.
The amount of new state pension will receive depends on your National Insurance (NI) record throughout your adult life.
If you have made at least 35 years of qualifying NI contributions, you should qualify for the maximum amount.
The same is true if you have received equivalent credits on your NI record for raising children or providing care.
If you don’t have 35 years, you may be able to top up your record by paying in voluntary NI contributions or checking for free NI credits.
To get the full basic State Pension, you will need 30 years of NI contributions or credits.
To get any State Pension at all, you will need at least 10 years on your NI record.
HOW MUCH CAN I GET?
State Pension payments were increased in April.
The full rate of the new State Pension rose from £203.85 a week to £221.20 a week – or £11,502.40 in total over a year.
This is what the state pays those who reach state pension age after April 6, 2016.
The full basic State Pension under the old system is now £169.50 per week in 2023/24 after rising by 8.5%.
This is paid under the old pension system and is for those who retired before April 6, 2016.
CLAIMING THE STATE PENSION
YOU won't automatically get the state pension - you need to claim it once you're eligible.
You should receive a letter explaining what to do no later than two months before you reach state pension age.
You can apply for the State Pension online by visiting www.gov.uk/get-state-pension.
You can choose to defer getting the state pension – you don’t have to take it as soon as you are eligible when you reach state pension age.
Leaving your state pension untouched can boost the amount you eventually get.
If you opt to defer your state pension, your entitlement increases by the equivalent of 1% for every five weeks you do so.
As the state system can be tricky to navigate, requesting a state pension forecast is a key part of pension planning.
This will help you understand how much you could be eligible to receive and at what age.
View your State Pension forecast by visiting www.gov.uk/check-state-pension.
CHECK FOR MISSING YEARS
If you think you’re missing National Insurance years, the first thing to do is check your State Pension forecast.
You can check this as well as the State Pension age through the government’s new ‘Check your State Pension’ tool online at www.gov.uk/check-state-pension.
The tool is also available through the HMRC app, which you can download free on the Apple App Store and Google Play Store.
You’ll need to log in using your Personal Tax Account login details. If you don’t already have an online HMRC account, you can register at gov.uk.
It shows you how much your state pension could increase by and what NI years you’ll need to buy to achieve this.
You’ll then be able to pay for these missing years securely online, without having to call up separately.
You’ll need to pay for these in full – you can’t pay in instalments.
You can’t use the online service if you’re already getting your State Pension.
Instead, you’ll need to call the Pension Service on 0800 731 0469.
However, before you commit to buying new National Insurance years it’s vital you check whether you were entitled to free credits at any point.
CHECK FOR NATIONAL INSURANCE CREDITS
Before making a voluntary contribution, it is important to check if the gaps in your contributions can be filled with free NI credits.
Thousands are thought to be missing out on these NI Credits, leaving them worse off in retirement.
For example, those on certain benefits should qualify for Class 1 credits.
This includes parents with active claims for child benefit.
You can check the full list of people eligible to claim credits by visiting www.gov.uk/national-insurance-credits/eligibility.
It explains the circumstances where you’ll need to claim and when you’ll get it automatically.
TOP UP YOUR NATIONAL INSURANCE YEARS
In some cases, buying back missing years can be really valuable.
But earning back the years isn’t free, so your voluntary contributions come at a price.
If you fill gaps between 2006/07 and 2015/16, you’ll pay the 2022/23 rates for contributions.
It is worth £15.85 a week, which means it costs £824.20 to buy one year of contributions.
As the state pension was £185.15 per week in 2022/23, this boost would add £5.29 per week or around £275 per year.
Although you’d have to pay £8,242 (10 lots of £824.20), the annual state pension boost would be around £2,750.
Someone who was retired for 20 years would get back around £55,000 in total (before tax).
Anyone under 73 can make voluntary pension contributions, as it’s assumed everyone under this age will claim the new state pension.
If you’re below the state pension age, you can check your state pension forecast by visiting www.gov.uk/check-state-pension to determine if you’ll benefit from paying voluntary contributions.
You can also contact the Future Pension Centre by calling 0800 731 0175.
If you’ve reached state pension age, contact the Pension Service to find out if you’ll benefit from voluntary contributions.
You can contact this service in several different ways by visiting www.gov.uk/contact-pension-service.
You can usually pay voluntary contributions for the past six years.