PENSIONERS are being urged to check if they’ve got a missing state pension after one retiree found he had a pot worth a whopping £132,800.
Currently, pensions of up to £168.60 a week are paid by the state to men born on or after April 6 1951 and to women born on or after April 6 1953.
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To get the cash, you need to have paid national insurance contributions for at least 10 years, and you need at least 35 years’ of contributions for the full state pension.
This is what’s known as the “new” state pension.
Those who reached state pension age before April 6 2016 get the old “basic” state pension, which is slightly different.
But crucially, neither of these state pensions is paid automatically – you have to claim them.
‘How I reclaimed my £133,000 state pension’
PETER Williams, 76, from Cardiff thought he wasn’t entitled to a state pension after contracting out of the additional state pension.
After retiring, he had been forced to make ends meet on two workplace pensions, worth £234 and £275 a month respectively.
This meant he had to stop going to his local pub and travelling on holidays to Spain and Portugal to save money.
Peter has no family to help him with his finances and it was only after a chance encounter with an equity release company called Responsible Life that an advisor suspected Peter might be entitled to a pension.
You don’t need to use an equity release firm to check your entitlement to the state pension as you can ring the state pension claim line yourself for free on 0800 731 0469.
Peter had been considering equity release – a type of product that lets you release equity in your home, although not without risk – to update and decorate his property.
But now the state pension service has confirmed he had unknowingly deferred his state pension for 11 years, which means he can take it as a cash lump sum of nearly £133,000, as well as £274 a week on top.
He said: “Words cannot describe the elation I feel. Responsible Life’s open-handed approach to my situation has changed my life and provided me with a very positive future.
“I no longer need to release equity in my property and will be able to live comfortably on my pensions.”
You should have been sent a pension pack by the government when you were approaching state pension age telling you how to claim.
What happens if I haven’t claimed my state pension?
If you did nothing when you approached state pension age or don’t remember getting this pack, then your state pension will have been deferred.
The good news for pensioners is that your pension is boosted every year you defer it.
Under the current scheme, you’ll get an extra 5.8 per cent for every year you defer while it’s an extra 10.4 per cent a year under the old system.
Under the new scheme, payouts are added to your weekly pension payments, but under the old system you can opt for a cash lump sum that includes 2 per cent interest on top.
Retiree Peter Williams (pictured above) opted for a lump sum of £132,800 when he realised he had a missing old-style basic state pension he’d unwittingly deferred for 11 years.
He also now gets a weekly state pension of £274 a week on top.
One of the reasons he didn’t think he was owed the cash was because he had done something called “contracting out” of the what’s known as the “additional state pension”.
The additional state pension doesn’t exist anymore and you can’t contract out, but in the past, this is where you paid lower national insurance contributions or had cash paid into a different pension, such as a private pension.
This could result in your state pension being lower, but it doesn’t mean you’re not entitled to any state pension so it’s vital to check.
How do I check if I’ve got a missing state pension?
If you’ve reached state pension age, you can check if you’ve got a state pension that you’re eligible to claim by calling the Pension Service on 0800 731 0469.
Once you know you’ve got one, you can claim by calling the state pension claim line on 0800 731 7898 or use the following form.
If you’re under the new state pension you can also claim online.
For those who’ve yet to reach state pension age, you can request a state pension forecast that tells you how much state pension you could get and when you’re likely to get it.
If like Peter you’re unsure if you contracted out, you can check your payslip or with your employer or by contacting your pension provider.
If you can’t remember your pension provider, then the Pension Tracing Service might be able to find it for you.
A Department for Work and Pensions spokesperson said: “We want everyone to be able to claim what they are entitled to and have a wide range of channels where people can get information and advice.”
For more information, read our guide on what age you can retire in the UK, when you will get your pension, and how much the state pension is.
Grandparents have also been warned to claim pension credit before the August 13 deadline or they may miss out on up to £70,000.
And when it comes to personal and workplace pensions, here’s how pension fees could reduce your savings pot by hundreds of thousands of pounds – and how to avoid them.
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