Many are being advised to check their state pension forecast in advance, in order to avoid disappointment and give themselves time to prepare.
This is Money has highlighted certain issues that the new flat-rate pension could cause for those nearing retirement. Many people could end up with less state pension payments than they initially thought, potentially leaving them in a difficult financial situation. If you are concerned about your pension, here are some ways you can prepare…
Check Your State Pension Age
Head to the government website and enter your birth date. You will be given the date at which you will start receiving a state pension. There are plans to phase in a higher state pension age, and those born between 1970 and 1978 should add on a year.
Get A State Pension Forecast
You can check how much you are due to receive by visiting the government’s State Pension Forecast page. You will need to register for an activation code which will be sent through the post, or you can use the government verify scheme which is much quicker. The process will take around 15 minutes, and 2 minutes every time you wish to use it afterwards. You need to have access to your National Insurance number and either a passport, diving license or credit card.
Based on your NI contributions, you may not be eligible for a full flat-rate pension, and therefore you might need to top this up if you have gaps in your NI record. While this requires a lump sum deposit, you stand to receive more back in state pension over the course of your retirement.
Once you know how much you are due to receive in retirement, you can take appropriate steps to either increase or reduce the amount you pay into a private pension; although it is always wise to save as much as you can.