Thousands could lose out on pensions

Thousands of people across the South West could end up not being entitled to a full state pension when they retire, warns ACCA (the Association of Chartered Certified Accountants).

Chas Roy-Chowdhury, ACCA head of taxation said: “Most workers do not have to worry that their National Insurance contributions are up to date, the group that are most at risk from not having the full qualifying years are those that are self-employed.

“Figures show that 16% of people from the South West are self-employed potentially meaning thousands of workers might not be entitled to a full state pension.”

If you reached state pension age on or after 6 April 2010 you will need to have at least 30 years of National Insurance contributions to be entitled to the full basic state pension.

Mr Roy-Chowdhury continued: “It is not only the self-employed that may not qualify for a full pension, other groups include; employed but earned below the ‘lower earnings limit’ unemployed and not claiming benefit, self-employed and you didn’t have to pay Class 2 National Insurance contributions because you applied for and were issued with a CA6812 Small Earning Exception certificate or living abroad.”

The ‘lower earnings limit’ is calculated as those earning under £110 per week at the 2013/2014 tax year rates.

“If you fall in to any of these categories I would advise you to contact HMRC (Her Majesty’s Revenue and Customs and obtain a statement of you National Insurance account.

“If you do not have the full number of qualifying years it may be beneficial to seek qualified financial advice before deciding whether to top up your contributions, as it is not always beneficial to do so, depending on your individual circumstances. A qualified chartered certified accountant will be able to help.

“Plans are in the pipeline to reform the eligibility criteria for the full state pension, so it is worth keeping an eye out in future for changes that could affect whether you are entitled to it.”

HMRC provide more information about National Insurance contributions for the state pension on their website at: http://www.hmrc.gov.uk