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Part Time Work & The State Pension

I have recently reduced the number of hours I work as I am nearing retirement age. I am slightly concerned that my reduced hours may affect my entitlement to the basic state pension and other state benefits. Is this the case?

Entitlement to state pension is determined by the number of qualifying years that you achieve during your working lifetime.  From 6 April 2010, the number of qualifying years required to receive a full basic pension is 30.  Prior to that, it was 44 years for a a male and 39 years for a female.

For the current tax year ending 5 April 2010, you need to have total earnings of at least £4,940 to achieve a qualifying year.  (For self-employed indiviudals, a profit of £5,075 is required.)  Achieving a qualifying year for state pension also protects your rights to state benefits such as incapacity benefit, even if your earnings fall into the 'lower earnings limit' which is currently between £95 and £100 per week.  Employees achieving earnings in that range do not suffer deduction of any National Insurance Contributions from their earnings, but are still credited with a qualifying earnings year.

If you are concerned about the number of qualifying years you have achieved, you should speak to your local TaxAssist Accountant to discuss obtaining a pension forecast.  This will allow you to review your position and consider making voluntary contributions if necessary, to ensure that you achieve the full basic state pension.

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0800 0523 555

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