There are numerous reasons why a person may not receive the full state pension, ranging from mistakes to not having enough National Insurance qualifying years.
And for those who do, it is possible that they will wish to boost the amount even further before retiring.
There are numerous ways to increase one’s state pension, and while some will not apply to everyone, it may be worth investigating whether one qualifies.
Penfold CEO and co-founder Pete Hykin proposed eight strategies for customers to enhance the amount they can get.
He said: “The foundation of boosting your state pension lies in the accumulation of National Insurance credits.
“The more years you contribute, the larger your pension will be. But there are other avenues to explore.”
1. Voluntary National Insurance contributions
For those who have gaps in their National Insurance record and can’t claim National Insurance credits, it may be they opt to make voluntary National Insurance contributions.
Mr Hykin said: “If you’ve missed some years of contributions, you can make voluntary contributions to fill those gaps.
“This can increase your entitlement, but it’s essential to check whether the additional contributions will indeed boost your final pension amount.”
2. Deferring the state pension
Those who haven’t yet claimed their state pension may opt to wait longer before they do so, in a bid to increase the amount they get when they do claim.
“If you can afford to, delaying when you start taking your state pension can result in a higher weekly payment.”
For the new state pension, the increase is roughly one per cent for every nine weeks a person defers, but conditions apply. The rules are different for the basic state pension.
3. Pension Credit
Hundreds of thousands of pensioners are eligible for a state pension top-up but aren’t claiming it.
“For those on a lower income, Pension Credit is a tax-free benefit that can give your annual pension income a significant lift,” Mr Hykin said.
“However, not claiming Pension Credit when you’re eligible could result in losing out on other benefits, so it’s crucial to look into this.”
4. Inheritance and divorce
Another important consideration is what happens to the state pension upon death or in the event of a divorce.
Mr Hykin said: “Understand that your state pension might be inheritable or shareable upon divorce.
“If your spouse or civil partner has a robust National Insurance record, you may inherit part of their additional state pension, boosting your own.”
5. Working after state pension age
There is no fixed retirement age, which means people can work beyond state pension age if they need to or wish to – and this could be how some decide to boost their retirement income.
Mr Hykin said: “You can continue to work after reaching your state pension age, which not only adds to your income but also allows you to defer your state pension for a higher amount later.
6. Check for errors
Spotting for errors which could have arisen is another top tip.
“Always review your National Insurance record for any errors or gaps. This ensures you’re getting the full amount you’re entitled to receive.
7. Claim Child Benefit
“Parents who claim Child Benefit can gain National Insurance credits, which can help in boosting your state pension in the long run.”
8. Contracting out
“If you were part of a ‘contracted out’ private pension, be aware that this could affect your state pension amount,” Mr Hykin warned. “Make sure to review how much you may get.”
Checking how much a person is due to get via their state pension, known as a state pension forecast, is important, and seeking financial advice from a qualified professional is recommended.
Mr Hykin said: “It’s crucial to regularly review your state pension forecast and consult with a certified advisor to explore which options align best with your financial goals and lifestyle expectations.
“Timing and individual circumstances can significantly impact the effectiveness of these strategies, so due diligence and professional advice are key.”