State pension warning as simple mistake could leave you without cash – and how to avoid it

IF you’re reaching retirement age, make sure you don’t make this simple state pension mistake.

Those reaching retirement age will most likely be thinking about how much they’ll get for their state pension.

The maximum new-style pension you can get is £185.15 a week.

This is going up by 10.1% from April following the government’s Autumn Statement.

That means the weekly allowance will rise to £203.85.

But many people might not know that the state pension is not paid automatically so if you’re reaching retirement age, make sure you apply.

This means you could end up missing out on nearly £200 week, that’s £9,627 a year.

Deferring your state pension could get you more money

However, if you do forget to apply, or choose to defer it, then it could mean you end up getting more money.

The DWP said: “Your pension will automatically be deferred until you claim it.”

Your state pension increases by the equivalent of one per cent for every nine weeks you defer.

This works out as just under 5.8 per cent for every 52 weeks.

The extra amount is then paid with your regular state pension payment.

For example, if you get the full £185.15 a week then by deferring for 52 weeks, you’ll get an extra £10.74 a week.

However, you could be taxed on the deferred payments so do make sure you do the maths first.

How to apply for the state pension

You’ll have to apply for the state pension – it won’t just be paid automatically once you’ve reached retirement age.

Around two months before you reach retirement age, you should get a letter from the Department for Work and Pensions (DWP) telling you what you’ll qualify for.

You can begin applying for your state pension from three months until you reach retirement age, even if you haven’t received the letter.

You can apply online at the gov.uk website for England, Scotland and Wales – if you haven’t got your invitation letter you’ll need to contact the DWP first to ask for an invitation code.

You will then need:

• the date of your most recent marriage, civil partnership or divorce
• the dates of any time spent living or working abroad
• your bank or building society details
• the invitation code from the letter about getting your State Pension

If you live in Northern Ireland then you need to apply on the nidirect.gov.uk website.

If you start your claim in the first 12 months after you reached State Pension age, you can ask that the claim is backdated to when your entitlement started.

How do you qualify for the state pension?

The full state pension is only paid to those with a minimum 35 years national insurance contributions.

This is one of the taxes you pay while working and builds up your entitlement to the state pension.

There may be gaps if you were unemployed, lived abroad or took time off to care for children or relatives, which means you could get a lower amount.

But in some cases you can apply for credits to top up your retirement fund.

Once you’ve started receiving the state pension, there are ways to boost it too.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk