He explained several important rules about how the state pension works
Martin Lewis has set out some important rules to understand regarding your state pension. He offered some thoughts about National Insurance contributions as well as how you can boost your DWP pay packet.
A query was sent into his BBC podcast from someone whose family member was approaching 40. This person was in the uncommon situation of having accumulated no National Insurance (NI) contributions, as they had never been employed or claimed any benefit to receive NI credits. The questioner asked that should their relative carry on in this manner with zero contributions, what would they be entitled to under the current DWP rules. In his response, Mr Lewis said there is a “hard bottom and a soft top” concerning how your state pension entitlement operates.
He said: “For those who don’t know, National Insurance contributions are when you work or if you get certain benefits if you look after children, you get a National Insurance credit. I think of it like a token – for each year that you work, you get a National Insurance credit – a token that goes into the piggy bank.”
The rules can vary
The consumer champion continued to clarify the general rule of thumb here: “I generally say you need 35 years worth-ish of National Insurance to get the full state pension. But it really is in ‘ish-‘. For some people it’s more, for some people it’s less.
“Just because you’ve got your full state pension entitlement, doesn’t mean you stop paying National Insurance if you’re working, and you’re under state pension age.” This represents the ‘soft top’ Mr Lewis mentioned, as the amount of National Insurance contributions required to qualify for the full state pension varies depending on your circumstances.
The full new state pension presently pays £241.30 a week, or approximately £12,550 annually. In line with the current rules, a person generally requires 35 years of NI contributions to receive the full new state pension, or 30 years’ worth to obtain the full basic state pension.
If you want to check how much state pension you’re projected to receive, you can do so using a tool on the Government website.
‘Hard bottom’ explained
However, the rules are far more straightforward regarding the threshold where you become eligible for any state pension payments whatsoever. Mr Lewis said: “The bottom is a hard bottom, because to get any state pension, you need 10 years of National Insurance credits.”
There is the option to pay for filling any gaps in your National Insurance record, up to six tax years. This may be worthwhile considering if you’re missing contributions but are very close to the 10-year threshold to secure a payment.
Mr Lewis highlighted one success story here, of somebody who had nine years’ worth paid in, and so purchasing just one year proved “hugely valuable” for them. Buying the extra year lifted them from zero entitlement for the state pension, to qualifying for roughly a third of the full amount.
This meant that within three months of beginning to receive their state pension, they would have recouped the money they spent filling in the one-year gap. If you reached the minimum 10 qualifying years, you could receive £68.90 a week under the current full new state pension rates, boosting your income by £3,582.80 a year, or nearly £300 a month.
‘The obvious thing’
However, if you reach state pension age with a very low income and no state pension entitlement, you can still access DWP support. Mr Lewis said: “The obvious thing for someone with no or low income is Pension Credit.
“Pension Credit is effectively a top up to any or no state pension that you get, to give you a minimum income. So for people who have less than about £240 of income a week, including state pension and private pension and any income from savings and investments, then they can get the Pension Credit top up.”
Pension Credit is available to those of state pension age – the access age is currently being gradually raised from 66 to 67, between April 2026 and April 2028. The benefit tops yp your income to £238 a week if you are single and up to £363.25 if you have a partner, so if your relevant income falls below these figures, you may be eligible.
However, additional amounts can be added on top of this income top-up depending on your circumstances, effectively raising the threshold of how much income you can receive while still qualifying for the benefit. For instance, you can receive an extra £86.05 a week if you have a severe disability, or an extra £48.15 weekly if you are a carer for another adult.
Furthermore, Pension Credit claimants can access a wide range of additional support. Mr Lewis said: “Pension Credit interestingly is actually a gateway benefit that opens up access to a whole other load of benefits.”
Those receiving the benefit can access extra help including council tax reductions and additional financial support towards housing costs, along with help covering NHS expenses and a free TV licence for claimants aged 75 and over.
