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State pension explained: Four easy ways to increase your retirement payments

Daily Express logo Daily Express 16/08/2022 Patrick O'Donnell

Currently, around 12.5 million people now receive the state pension, of which an estimated 2.5 million claim the new state pension. New data from the Department for Work and Pensions (DWP) shows that the historic gender gap is closing but 1.5 million women earn less than £100 per week from the state pension. In light of this, experts are reminding people what they can do to boost their pension earnings to achieve a better retirement.

As it stands, the average state pension incomes for women were £165.05 per week for the new state pension and £146.70 for those on the old state pension.

In comparison, a man's average income comes to £170.49 per week on the new state pension and £172.71 for the old state pension.

Despite this, 1.9 million older people are living on just £100 per week with the vast majority of them being women.

However, through voluntary National Insurance contributions and benefits such as Pension Credit, it is possible to boost someone's retirement payments.

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Helen Morrissey, the senior pensions and retirement analyst at Hargreaves Lansdown, outlined the plight of many older people living in the UK.

Ms Morrisey said: "Women continue to close the gender state pension gap with average income up to £165.05 per week for the new state pension and £146.70 for the old state pension - up from £160.11 and £141.98 the previous year.

"This is great news but it's also worth remembering that many people do not receive anywhere near the full amount.

"Over 1.9 million people still receive less than £100 per week from their state pension - that shocking statistic is on the way down but shows just how many pensioners could be struggling.

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"Some of these people will have other pensions they can use to supplement their income but those who don't face incredibly difficult times as the costs of essentials like fuel and food continue to soar."

In light of this, the financial expert shared how older people can boost their state pension forecast to get the full amount they are entitled to.

Claim Child Benefit

With the gender gap still being a factor, Ms Morrisey encouraged women to apply for Child Benefit if they can as it will give them the chance to acquire vital National Insurance credits which go towards their state pension.

She added: "Many women have missed out on this in the past because their husband claimed the Child Benefit rather than them.

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"Others missed out when they opted out of Child Benefit after the introduction of the high-income Child Benefit tax charge. If you claim Child Benefit in your name, then you will get the NI credit towards your pension."

Specified Adult Childcare Credit

On top of this, those approaching state pension age can apply for Specified Adult Childcare Credit if they are looking after a family member under the age of 12 while their parent or main carer goes back to work.

This could mean they qualify for National Insurance credits as the parents or guardian who is working transfers their credits over to them.

Buy NI credits

It is also possible to purchase voluntary class 3 National Insurance contributions which costs around £800 for a full year's worth.

Claim Pension Credit

State pensioners are also able to claim Pension Credit if they are on low-income which can top-up how much they receive from the DWP. On top of this, those in receipt of Pension Credit are eligible for the Government's £650 cost of living payment.

"Pension Credit claimants also qualify for an extra £650 cost of living payment to help them through the current crisis," Ms Morrisey explained.

"This was split into two payments of £326 and £324. The first payment is already hitting people's bank accounts with the second expected later this year. The Government held a Day of Action in June designed to boost awareness of this much underclaimed benefit to help more people access this extra money.

"We hope to see a surge in the number of claimants when the next batch of data is published."


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