Former DWP employee Sandra Wrench said many people who stop working before State Pension age could miss out on qualifying years, NI credits and other financial support.
Individuals considering leaving employment before reaching State Pension age are being advised to examine their National Insurance (NI) record meticulously to prevent gaps that could impact their retirement payments.
Former Department for Work and Pensions (DWP) employee Sandra Wrench, who spent 42 years working in State Pensions and benefits, explained many individuals mistakenly believe they will automatically qualify for the full New State Pension after finishing work early or cutting their hours. Most individuals require approximately 35 years’ worth of NI contributions to obtain full State Pension payments and 10 to qualify for any at all.
Sandra highlighted there are multiple ways individuals can keep building qualifying years towards their State Pension, including through part-time employment, NI credits and certain benefits.
The first point to note is that the State Pension age has begun rising from 66 to 67, scheduled to be completed for all men and women throughout the UK by March 2028.
Those born between April 6, 1960 and March 5, 1961 will experience their retirement age rising to 67, with the precise age determined by their date of birth. The simplest method to verify when you will retire is to use the online State Pension age tool on GOV.UK, reports the Daily Record.
The full New State Pension is currently worth up to £241.30 per week during the 2026/27 financial year, though the sum someone obtains depends on their National Insurance record. Sandra told the Daily Record: “A qualifying year can consist of earnings, NI credits and voluntary contributions, or a mixture of these.”
She explained that individuals in part-time employment may still be able to accumulate qualifying years even if they are not directly paying National Insurance contributions.
For the 2026/27 tax year, employees earning at least £129 weekly from a single job are considered to be paying NI contributions towards their State Pension, even if their income falls below the threshold at which contributions are deducted from wages. Sandra said this can help individuals who transition into part-time work before State Pension age avoid making unnecessary voluntary contributions.
She also emphasised the significance of NI credits associated with benefits including Universal Credit, New Style Jobseeker’s Allowance and Employment and Support Allowance (ESA).
Sandra said she knew of one woman who left work at 60 and later developed multiple sclerosis (MS) at age 64, but was unable to claim ESA because she had not paid or been credited with enough NI contributions in the relevant tax years. Sandra said: “NI contributions are not just for the State Pension.”
The former DWP employee also drew attention to support available to grandparents through Specified Adult Childcare Credits. These credits enable parents who have returned to employment to transfer unused Child Benefit NI credits to a grandparent or relative under State Pension age who assists in caring for a child under 12.
Sandra explained how she assisted a retired police officer in claiming the credits while caring for a grandchild, which meant the officer avoided having to pay voluntary NI contributions to enhance her State Pension entitlement. Carers may also be eligible for NI credits via Carer’s Allowance or Carer’s Credit.
Sandra drew attention to one instance where a woman left employment to care for her mother but mistakenly thought claiming Carer’s Allowance would diminish her mother’s Attendance Allowance payments. Consequently, she lost out on both financial assistance and NI credits which could have been counted towards her State Pension.
Sandra is also encouraging people to routinely review their NI record and State Pension forecast via GOV.UK before determining whether to pay voluntary contributions. She explained that some individuals are being informed they can pay for missing years even when they are already set to receive the full New State Pension by the time they reach the official retirement age.
Sandra noted that people contemplating early retirement may wish to consider leaving employment partway through a tax year rather than at its conclusion, as this could lower the sum required to fill any partial NI gaps.
The former DWP employee also cautioned that many workplace pensions are now tied to State Pension age, meaning some individuals could face reductions if they take occupational pensions early.
People can review their NI record and State Pension forecast via the GOV.UK website or by contacting the Future Pension Centre.
You must be logged in to post a comment Login