The Government will write to many over 50s, telling them they won’t receive the new State Pension.
The Government is set to write to more than 100,000 people informing them they won’t receive the new State Pension.
Under new rules introduced this year, people need to rack up at least 10 years’ worth of National Insurance (NI) contributions to qualify for any pension whatsoever.
However, there are concerns that many thousands of workers are completely unaware they’ve not yet met this minimum requirement, setting them up for a nasty shock when they reach State Pension age.
Prepare for your retirement: compare self-invested pension plans (SIPPs)
Who will be contacted?
As a result, the Department of Work and Pensions has agreed to write to those at risk at some point this year.
It’s said the letter will be a one-off, so keep a close eye on your post!
Obviously there are many younger workers who’ve not yet met that threshold, so the letters are going out to those who are less than a decade from State Pension age.
What is the new State Pension?
The new State Pension was launched to replace the more convoluted two-tiered system.
While it has arguably simplified the process, there have been a lot of unintended consequences and confusion as to how much people can actually expect to receive.
So how does the new deal work? If you reached State Pension age on or after 6th April 2016, you'll receive the new single State Pension.
This is currently set at not less than £155.65 per week. But in order to receive that amount you need 35 'qualifying years' of NI contributions or National Insurance credits.
Prepare for your retirement: compare self-invested pension plans (SIPPs)
What if you have a shortfall?
If you have missing years (perhaps from raising a family, or travelling) then you won’t qualify for the full State Pension.
However, you can top up your National Insurance contributions so that you get the full entitlement. As mentioned earlier, you'll need at least 10 years to get any State Pension.
You can get a State Pension estimate from the GOV.UK website.
You can also learn more about the new State Pension with our informative guide.
You can also read all about the “new” pension freedoms here.
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Over 55s stung by hefty pension exit fees