Please note that the value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.
The Government says it owes an additional £1.3bn in state pension benefits to hundreds of thousands of parents who have taken a career break to raise children.
Department for Work Pensions report
In a report on 6 July 2023, The Department for Work and Pensions (DWP) said that roughly 210,000 people in Britain have been affected by past administration errors.
People have been receiving incorrect payments, and it relays to failures in accounting for so-called home responsibilities protection on national insurance contributions as the protection guarantees non-working carers and parents the right to state pensions.
In May 2023 the DWP said that administration errors had meant that Britons had been incorrectly paid by £670 million in the financial year 2022-23, which ended 31 March 2023.
However, since then the DWP has said it is working on repaying those shortfalls to the Britons first detected in 2021, which now totals £1.2bn. The people mainly affected were widows and married pensioners.
It has also been discovered that the people who received underpayments mainly affected women. The DWP said it approximated shortfall at 1.3bn, although they did say this number was not certain, it could be as high as £1.5bn or as low as £310m.
The DWP said:
“DWP cannot begin to correct cases until HMRC, which administers both national insurance and child benefit records, corrects the National Insurance records and notifies DWP”.
The DWP said it would write to people who have been affected by the incorrect payment, although it’s important to note that in particular cases child benefit records may need to be removed to ‘comply with data protection.’ The DWP also said that it would soon be launching a campaign to encourage Britons to come forward if they think they have been affected by the underpayments.
You’ll usually need at least 10 qualifying years on your National Insurance record to get any State Pension and 35 qualifying years to get the full new State Pension.
If you receive the new State Pension, the full amount you’ll receive for the 2023/24 tax year will be £203.85 a week (compared to £185.15 a week for the 2022/23 tax year). You can claim the new State Pension if you’re: a man born on or after 6 April 1951 or a woman born on or after 6 April 1953.
However, the state pension alone may not be sufficient to pay for the lifestyle you have been accustomed to whilst working and you may need to consider how else you can generate an income.
Having access to more than one source of income, whether this be personal pensions, investments, savings, or rentals, can make a real difference to your lifestyle choices in retirement.
The earlier you begin saving for retirement the better. A financial adviser can help you to decide, how much is enough, how much you need, and where best to save, ensuring a balance between your current financial needs and future financial goals.
How can we help?
Zoe Till is a Partner and Chartered Financial Planner in our expert Investment Management team. Zoe’s areas of expertise include investment advice, retirement planning, Inheritance Tax and lifetime cash flow modelling.
If you would like any advice in relation to the subjects discussed in this article, please get in touch with Zoe or another member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online form.
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