Why you really need a full State Pension
Catherine Alexander
Partner
The income from the State Pension is extremely valuable, being guaranteed and protected against inflation. Latest annuity prices show that replacing the current full State Pension would cost £205,430, and if you wanted to generate the same pension using drawdown, you would need in the region of £265,005.
There can be lots of reasons why you might not get the full State Pension. For example, if you have taken time out of work to raise children or care for elderly parents, if your earnings have been very low or you have worked for yourself, or if you have spent time living and working abroad.
Entitlement to the State Pension is based on your National Insurance (NI) contributions. To get the full State Pension you need to have made NI contributions for 35 complete years by the time you reach the National Retirement Age (currently 66). You can check your NI contributions using the government’s online service, this will show you if you have any gaps and you may be able to fill these with voluntary contributions or NI credits.
As we previously covered, the government extended the window to fill in missing years of NI from 2006 to 2017. Usually, it’s only possible to pay for gaps for the previous six years. This extension runs until 31 July 2023, after this the window will revert to the usual six-year period.
References
Fidelity International: https://www.fidelity.co.uk/
This article isn’t personal advice. If you’re not sure whether a course of action is right for you, ask for financial advice. All investments can fall as well as rise in value, so you could get back less than you invest.
