Thousands could miss out on state pension cash if they don’t apply for out of work benefit now

THOUSANDS of Brits could miss out on extra state pension cash if they don’t apply for a major out of work benefit.

At the moment, you need 35 qualifying years of National Insurance to receive the full new state pension, which is worth £221.20 a week.

This is what the state pays those who reach state pension age after April 6, 2016.

To get any State Pension at all, you will need at least 10 years on your National Insurance record. 

However, these rules can make it problematic for those who need to take time off work due to illness or disability.

It could mean someone forced into early retirement could miss out on the full new state pension worth £11,502.40 a year.

However, households can get free years with National Insurance credits.

Getting just one year of these credits can add over £325 per year to your eventual state pension.

Those claiming certain benefits, including Universal Credit, qualify for these credits automatically, meaning they won’t miss out.

However, eligibility for this benefit is limited to working and non-working households with low incomes and savings of less than £16,000.

Another benefit they may qualify for instead is “new-style” employment and support allowance (ESA), which can be claimed regardless of income or savings.

You can apply for new style ESA if you are under state pension age (66) and have a disability or health condition that limits your work ability.

You must also have worked or been self-employed and paid enough National Insurance contributions, usually in the last two to three years.

Steve Webb, a partner at pension consultants LCP, fears that thousands of people who cannot work miss out on vital NI credits by not applying for new style ESA.

He said: “If you are unable to work because of disability, it’s vital to make sure you are claiming the correct benefits in order to protect your National Insurance record and to make sure you get a good state pension.

“It is only by claiming either Universal Credit or what is called ‘new style’ ESA that you get vital NI credits. 

“Even if you’ve been told on the phone that you may not qualify because you or a partner has too much income or savings, you should still apply simply to get the NI credits.”

With new-style ESA, you can receive weekly payments worth up to £138.20, on top of the free National Insurance credits.

However, the exact amount you’ll get will be affected if you get over £85 a week from a private pension.

Half of your private pension income over £85 will be subtracted from your weekly ESA payments if you do.

So, if you get over £350 a week from a private pension, you’ll unlikely qualify for weekly ESA payments.

But this doesn’t mean you can’t apply for the benefit and still take advantage of the free National Insurance credits offered.

Steve Webb added: “The ‘credits only’ award has been part of the system for decades.

“But information about it is scant, and people on DWP phone lines often don’t even mention it.

“Even if someone on the phone tells you that you aren’t eligible for the benefit payments, you should still apply to get these essential National Insurance credits.”

“Not doing this can leave a gaping hole in your National Insurance record and leave you short in retirement.”