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How to qualify for State Pensions : Q&A for carers
How many years of NI contributions and credits are needed for a full basic State Pension?
Until 6 April 2010, women will normally need 39 qualifying years of NI contributions and credits and men will normally need 44 qualifying years for a full basic State Pension. This is currently payable at age 60 for a woman and at age 65 for a man. However, this will all change from 6 April 2010 (Link to information about changes from 2010)
How much NI do I need to have paid?
In each tax year there is a minimum amount or ‘lower earnings limit’ that you have to be earning in order to make the right amount of NI contributions. The lower earnings limit is currently £95 a week, so a whole tax year is £95 x 52 weeks = £4,940. So if you have earned the equivalent of £4,940 within 2009/10, that year will usually be a qualifying year and will count towards the total qualifying years needed (currently 39 for a woman and 44 for a man).
What if carers don’t pay NI because they are not earning?
Certain people are ‘credited’ with NI contributions. This means that a contribution is put on their record equal to the lower earnings limit in each week that they fulfil certain conditions or receive certain benefits, including:
- Carer’s Allowance
- Jobseeker’s Allowance
- Employment and Support Allowance.
What happens if you have not been in receipt of earnings or benefits?
At the moment, Home Responsibilities Protection (HRP) protects your rights to a basic State Pension when you have been looking after a child or caring for somebody. HRP reduces the number of qualifying years that you will need to have paid, been treated as paid or been credited with NI contributions.
What is Second State Pension?
There is another State Pension, which is also built up through NI
contributions, and this is called the State Second Pension (which
replaced SERPS). If people are paying over a certain level of NI
contributions per year or get the right benefits, their contributions
are paid for them. This is worth about £1.60 a week in State Pension
paid for every qualifying year’s NI contributions. So a carer or a low
earner who has been caring or working for 10 years could get around an
extra £16 per week for all those years spent caring.
Warning signs that you may have gaps in your National Insurance record:
- breaks in paid employment that are not totally covered by benefits or child benefit
- time spent caring without realising you were entitled to benefits
- you have had periods on low level earnings, or had several jobs at the same time which paid below the level at which you pay NI contributions
- if you have been caring without your own income (and no children under 18) and didn’t receive any of the relevant benefits.