Personal Finance

State pension warning: You could lose £275 a year by missing one National Insurance credit

Workers require 35 years of National Insurance credits to qualify for the full state pension, however many fail to meet this threshold due to being in and out the workforce. These can include people choosing to become stay-at-home parents or full-time carers for loved ones. As well as this, recent Government plans are set to see part-time workers stripped off their state pension entitlement if implemented.

Speaking exclusively to, James Andrews, a senior personal finance editor at, outlined how much money people are at risk of losing when it comes to their state pension.

Mr Andrews explained: “Retiring with missing a single missing national insurance credit costs you a bit over £275 a year, every year of your life.

“That means in the run up to state pension age it’s vital you make sure you claim every qualifying year you can. To get the full state pension you need 35 qualifying years of National Insurance contributions, with people who have fewer than 10 years getting nothing at all.

“The first thing you need to do is work out where you stand – you can do this online here with nothing more than a Government Gateway ID and your password. Once you know where you stand, the good news is that there are several ways to boost your contributions in the run up to retirement.”

READ MORE: Woman, 88, in tears after losing £36,000 savings – after ‘scrimping’ for 50 years

The Government proposal to place a ban on exclusivity causes could potentially disenfranchise low income workers from receiving their full state-provided retirement pot.

In practice, the policy would make said clauses unenforceable in employment contracts where the guaranteed weekly income is below or equivalent to the Lower Earnings Limit which is currently £123 a week.

However, those who earn less than this threshold do not qualify for National Insurance credits.

To earn a National Insurance credit, workers need to make £123 a week from a single job. Anyone making £120 a week from two jobs at the same time receive nothing.


On this issue, Mr Andrews said: “It sounds like good news at first – giving part-time workers more flexibility and requiring bosses to pay them a certain amount if they want exclusivity – but the reality could see people lose out.

“This change might give people a feeling of false security – letting them earn more money by taking on multiple part time jobs – but at the cost of a far poorer retirement.”

However, the finance expert noted that there are things people can do to boost their state pension entitlement.

He added: “The simplest way to do this is to pay for missing years. You can make a one off payment to cover missing years all the way back to 2006 at the moment.

Mr Andrews said: “Even if you don’t take the money, making sure you’re signed up to child benefit or Carer’s Allowance means you get your National Insurance credit for that year. If you’ve passed state pension age, there are a few other routes to increasing your pension pot.

“For example, due to issues with the pensions system pre 2016, several thousand elderly, widowed and divorced women were underpaid, and ended up with a windfall of up to £23,000. If you’re in a similar situation, it’s essential to check and see if you’re due a payout.

“It’s also important to check you’re not owed any benefits you’re not already claiming – such as Pensions Credit, help with rent, heating costs, council tax reductions or even a missing pensions entitlement from a deceased partner.

“All of these can go towards boosting your pension funds.”


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