state pension forecast

How Important is Checking Your State Pension Before Retiring?

havenifa

havenifa


Posted on: 5th June 2024

When you set out an income for your retirement planning Cheshire, how many of you check your state pension forecast before stopping work? True, the State Pension may not be your primary income when you finally retire, but it can be the most reliable.

Having a regular income when you reach the State Pension age for the rest of your life is a valuable survival measure for later life. Under the triple lock, the State Pension increases each year; helping to maintain your spending power throughout retirement.

So it begs the question – have you been neglecting your State Pension, and does it require more attention? As independent financial advisers Cheshire, our team at Haven IFA would like to provide some practical reasons why a State Pension should be checked before you move ahead on your retirement.

The State Pension Rise

As far as pension advice Manchester goes, you have no doubt heard that the State Pension age is the earliest date you can claim your state pension, and it depends on when you were born.

As it stands, the State Pension age is 66 for both men and women. However, as you may have heard in the news, it is rising slowly. If you were born after April 5, 1960, you will see a phased increase to age 68, meaning you can’t claim until later. While further increases have not been announced, you can bet that it is on the agenda at some point in line with the increases in life expectancy. Calculations indicate that the State Pension Age will need to rise to 71 by 2050 to maintain the current ratio of workers to retirees.

Checking your State Pension forecast before retirement planning Cheshire will help you avoid that financial shock when you cannot claim when expected.

National Insurance Gaps

In 2024/25, the full new State Pension is $221.20 each week, over £11,500 a year. However, to qualify for that amount, you need to have made at least 35 qualifying years of National Insurance contributions. If you have less than 35, you’ll often receive only a portion of that amount.

If you are not entitled to the full amount because of gaps in your NI record, there could be an option to buy additional years that can help boost your income during retirement. A typical NI year would cost £824 and could add up to around £302.64 per year to your pre-tax State Pension income.

Before you fill in those gaps, you may want to consider your current retirement plans if you are several years away. You may reach the qualifying years you need without making any voluntary contributions.

Do you need to look into your State Pension situation with the help of independent financial advisers Manchester? Contact the team at Haven IFA today to discuss your retirement plans and the support we can provide.