We explain how many years you have to work and how much you need to earn in order to be entitled to the full new state pension. The new state pension is up to £185.15 a week
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When it comes to retirement provision, there are a number of things to consider – and it’s best to start planning sooner rather than later.
But unfortunately, research shows that many workers are still guilty of not thinking enough about their retirement, which puts them at risk of not being able to afford the lifestyle they desire.
A survey by Opinium, commissioned by Hargreaves Lansdown, shows that 34% of workers aged 45-54 have no remaining working life plans.
This compares to around a quarter of 35-44 year olds and 25-34 year olds who had no plans for the period between 50 and retirement.
Many people may assume that they are automatically entitled to the state pension – but how much you can actually claim depends on how many National Insurance (NI) contributions you have accumulated over your working life.
Here’s how to prepare for retirement
This means that the work you are doing now or other circumstances that could result in NI contributions will have a very large impact on your pension pot.
Helen Morrissey, Senior Pensions and Retirement Analyst at Hargreaves Lansdown, said: “These results point to a worrying lack of planning by those closest to retirement about how they want to spend their remaining working years.
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“The pandemic may well have played a role in this, as the economic upheaval may be wreaking havoc on people’s retirement plans as many older workers retire early after being laid off.”
“Transitioning into retirement through part-time work is often a better way to manage such a big change from a financial and emotional well-being perspective.”
What is the statutory pension?
The current statutory retirement age is 66 for both men and women, but is projected to rise to 67 by 2028.
There are two different types of state pension – the basic state pension and the new state pension – both of which will increase from April 11.
You are entitled to the basic state pension if you were born before:
April 6, 1951 if you are a man
April 6, 1953 if you are a woman
If you were born on or after these dates, you must apply for the new statutory pension.
Both types of state pension just went up and are now worth:
How many years do I have to work to get the state pension?
Depending on how many years you have paid NI contributions, you may not receive the full amount shown above.
You typically need at least ten qualifying years on your NI record to receive a state pension.
To receive the full new state pension, you need 35 qualifying years on your NI record or 30 years for the old state pension.
If you work, you’ll pay NI and get a qualifying year if you’re employed and earning more than £190 a week from an employer.
If you earn between £123 and £190 a week, your contributions will be treated as if they were paid to protect your NI records – meaning you’ll still get a qualifying year.
For self-employed you must earn at least £129 per week for it to count as a qualifying year.
You can receive NI credits when you are unable to work—for example, because of illness or disability, or when you are a caregiver or unemployed.
Some of the circumstances in which you can receive NI credits are:
- Claim child benefit for a child under 12 (or under 16 before 2010).
- Get Jobseeker’s Allowance or Employment and Support Allowance
- receive care allowance
You may also be able to pay voluntary NI contributions to top up your State Pension – find out more on the Gov.uk website here.
If you’re not sure how much you’ll get when you retire, you can get a pension statement.
Of course, the state pension is only one source of income in retirement.
You can improve your standard of living by saving for a personal or company pension scheme, or by exploring what other benefits you could receive.
https://www.mirror.co.uk/money/number-years-you-need-work-26773616 Number of years you must work to claim the full weekly State Pension of £185.15