State pension warning as simple change could make a 'big difference' in larger payments

Working Britons have been urged to make sure they are chipping in their maximum contributions towards their .

Peter Glancy, head of Policy, Pensions & Investment at Scottish Widows, urged people to act as the state pension will make up the majority of many people’s income during retirement.

He told : “To get the full state pension, you need to have worked 35 years where your National Insurance Contributions (NICs) have been large enough to earn a year’s credit.

“If you are working part time – check that you are doing enough hours to qualify for a year’s credit. An extra couple of hours a week might not make a big difference to your lifestyle today, but it could make a big difference in retirement.”

A person typically needs 35 years of contributions to get the full new state pension, which is currently £203.85 a week.

This is increasing 8.5 percent in April, to £221.20 a week, an increase of around £900 a year.

Mr Glancy also encouraged people planning for their retirement who are out of work, to see if they can get National Insurance credits towards their state pension.

He explained: “Whilst in many circumstances this will happen automatically if you are claiming a Carer’s Allowance, there are other circumstances when you will have to complete a form to secure the credit.”

He said another concern is thre trend of people going into retirement with large housing costs, still paying off a mortgage.

But there are ways people can plan ahead to avoid these costs. Mr Glancy said: “Owning your home outright when you retire will substantially reduce your costs during retirement.

“That can mean prioritising saving for a deposit when you are young and want to spend the money on other things. It also means not being so ambitious with the size of house you choose to live in, that you have to carry mortgage costs on through your retirement.”

The state pension age is currently 66 for both men and women, although this is set to gradually increase to 67 between 2026 and 2028, and then to 68 between 2044 and 2046.

The Government has been considering bringing forward the move to 68, with a decision on this matter due during the next Parliament.

Ask about this question, Mr Glancy said: “The Government has tended to link the state pension to life expectancy, so that the longer we live, the longer the period we spend in retirement but also the longer the period we spend in work, in order to pay for those longer retirements.

“There is a debate at present as to whether life expectancy will continue to rise or whether it has plateaued. We will watch those statistics with interest.”

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