Warning ! Your State Pension forecast and records could be wrong!
In recent press articles it has been highlighted that your State Pension forecast is not ‘guaranteed’ according to the Government’s Department for Work and Pensions. An accurate figure will only be available when they have completed working on the data. So, should we be concerned ? Well ‘Yes’ when you consider just what an important part your State Pension payment plays within planning your retirement - accuracy is vital.
The format for calculating the state pension changed in April 2016. Fortunately, gaining access to information about your state pension has been improved. You can now access your information online through the ‘Government Gateway’. If you already deal with your own tax returns, you will have registered for this online service anyway and can access the information through the same portal. If you haven’t already registered, don’t worry, it’s an easy process to register to access your information. Go to http://www.gateway.gov.uk/
However, if you’d prefer not to use the internet, you can still access your information using a BR19 form and send a request through the post. You can find a link to the BR19 form by searching ‘BR19 form’ on the Government web site.
One of the key rule changes which took effect in April 2016 was the qualifying years of contributions for maximum benefits. It was increased from 30 to 35 years.
But even with 35 years’ contributions, not everyone will get the publicised headline basic rate of £155.65 per week - some may receive less and some could receive more. This is why it is vital to check that the data held by the Department for Work & Pensions is correct – not only so that you have an accurate idea of what your benefit will be but to ensure the correct National Insurance contributions have been recorded.
So why could the information be incorrect? The new State Pension still includes information relating to Contracting In or Out of benefits, Graduated Pensions and even credits for those who could not work but may have been claiming certain Statutory Benefits – it’s complicated, so mistakes are made but, the sooner the mistake is identified, the sooner it can be rectified.
The good news is that if you find the information held on file is incorrect, you can request a full ‘manual calculation’ which can take 5 or 6 weeks to complete. It’s certainly worthwhile checking as the State Pension increases each year and, as a rule, we are all living longer too so having an accurate figure will help you plan for your retirement.
Ultimately it is your responsibility to ensure you get what is rightfully yours as no one will be checking on your behalf unless you have instructed an agent to do so. Our advice is to check the information is correct now to avoid issues later.