4 ways to boost your State Pension and retirement income

The State Pension is the backbone to lots of peoples’ retirement income. Under the current system, you need ten years’ worth of National Insurance (NI) credits to qualify for a State Pension. And 35 years’ worth to qualify for the full amount.

You pay National Insurance with your tax. Your employer will take it from your wages before you get paid, and your contributions are shown on your payslip. If you're a director of a limited company, you might also be your own employee and pay Class 1 National Insurance through your PAYE payroll.

However, with career breaks becoming increasingly popular, whether that’s to travel or look after families – it can be a struggle to reach your full State Pension entitlement.

Nearly two million retirees are receiving less than £100 a week in State Pension income. That’s around £40 or £80 less than the full amount each week, depending on whether they receive the basic or new State Pension.

Here are four ways to boost your State Pension and retirement income.

This isn’t personal advice. If you’re not sure what’s right for you, ask for financial advice. Pension and tax rules can change, and benefits depend on your circumstances. You also can’t usually take money out of a personal pension until at least age 55 (rising to 57 from 2028).

The government's free and impartial Pension Wise service can help those aged 50 or over understand what type of pension they have, how to access their savings and the potential tax implications of each option.

If you want to book a face to face appointment you can call Pension Wise directly or click the link to make a telephone booking.

4 ways to boost State Pension or retirement income

1. Plug any gaps in your National Insurance (NI) record

One of the main ways to boost your State Pension income is to plug any gaps in your National Insurance (NI) record by making voluntary NI contributions.

Full voluntary NI year costs around £800. But in return this could add up to an extra £275 in State Pension income every year. Across your retirement this could add thousands to your State Pension income.

You can check your NI contributions (NICs) history online to see if you have any gaps. You can then choose to make payments to make up for any shortfalls.

You can usually make up for breaks from the last six years. The deadline to do this is 5 April each year. For example, this means you have until 5 April 2023 to make up for any gaps in the 2016-17 tax year.

More on the State Pension

2. Claim child benefit

Women in particular miss out on valuable State Pension credits when they’re at home looking after children. But they can choose to claim child benefit and receive NI credits which will count towards how much State Pension income they’ll get.

Equally, any men that have been out of work to look after children can make a claim to receive NI credits. As long as your children are under 16, or 20 if they’re still in approved full-time education or training, you can make a claim.

3. Specified Adult Childcare Credit

If you’re under State Pension age and looking after a family member under the age of 12 while their parent goes back to work, you could boost your State Pension income. You might qualify for NI credits under Specified Adult Childcare Credit as the working parent essentially transfers their NI credit to you.

4. Claim Pension Credit

If you’re over State Pension age and on a low income, you should check whether you’re eligible for Pension Credit.

Pension Credit tops up your weekly income to £182.60 if you’re single and £278.70 in joint income if you have a partner. It can also entitle you to other benefits like help with council tax and a free TV licence.

Can you live off the State Pension alone?

Many believe the State Pension will be enough to live off alone. However, the likelihood is, for most people, it won’t be.

Currently, if you receive the full new State Pension, you’d get £9,627.80 a year. That’s £11,172 less annual income than the single person moderate living standard suggested by industry experts (£20,800).

Realistically you’ll need to make additional provisions. Your retirement could last 30 years or even longer, so you need to make sure you’ll have enough money to last as long as your retirement.

Our pension calculator can help you to work out how much your current pensions are on track to pay you by a certain age. And if you’re not on track, we offer some tips to help you reach your income goals.

Our planning tools can help you work out how much more you might need your private pension to pay and how you can make up for any differences.

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Looking to boost your retirement pot? Why not join over 440,000 clients already using the HL Self-Invested Personal Pension (SIPP)

You can open a HL SIPP by making a bank payment or by transferring your old pension(s). If you’re thinking about transferring, check you won't lose valuable guarantees or benefits or have to pay excessive exit fee.

Do ensure you maximise your workplace pension with employer contributions first. If you are unsure if a course of action is suitable for you please seek personal advice.

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