If you’re planning to retire after 6th April 2023, it’s important to review your national insurance record to ensure that you receive the full state pension entitlement. Changes in state pension rules mean that individuals may not receive the full amount if they have not accrued sufficient national insurance contributions or credits. In this article, we’ll discuss why your national insurance record is essential, the changes in state pension rules, and what you can do to maximise your state pension entitlement.
Why your National Insurance record is essential
Your national insurance record plays a critical role in determining your state pension entitlement. It is a record of your national insurance contributions and credits. To qualify for the full state pension, you need to have paid or been credited with national insurance contributions for at least 35 years. If you have less than 35 years of contributions or credits, your state pension will be reduced.
Changes in State Pension rules
Starting in April 2023, the rules governing the payment of state pensions will change. The new system, known as the single-tier state pension, will require at least ten years of national insurance contributions or credits to qualify for any payment. To receive the full state pension, you’ll need to have 35 years of contributions or credits.
How to check your National Insurance record
If you’re planning to retire on or after 6th April 2023, it’s essential to review your national insurance record before the deadline. You can check your national insurance record online or request a statement from HM Revenue and Customs (HMRC). If you find gaps in your national insurance record, you can pay voluntary contributions to boost your record or claim national insurance credits for certain circumstances, such as caring for a child or a disabled person.
Other aspects of retirement planning
In addition to reviewing your national insurance record, it’s important to consider other aspects of your finances when planning for retirement. This may include reviewing your savings, investments, Inheritance Tax, and pensions to ensure that you have enough money to support your lifestyle in retirement. Seeking professional advice from an accountant can help you review your financial situation, identify areas for improvement, and create a retirement plan that meets your needs.
Seek professional advice
To ensure that you’re making the most of your finances and planning for the future, it’s advisable to speak to a professional. Our team can help you review your financial situation, identify areas for improvement, and create a retirement plan that meets your needs. Get in touch today.