The government has agreed to write to individuals who do not have enough years of national insurance contributions (NICs) to qualify for the new state pension.

To receive any new state pension an individual must have at least 10 qualifying years of NICs.

People who are less than 9 years from state pension age and who are likely to have less than 10 years of qualifying NICs when they reach state pension age will get a letter.

The new single-tier state pension was introduced for those who reach state pension age on or after 6 April 2016.

Set at £155.65 a week, the new state pension applies to men born after 6 April 1951 and women after 6 April 1953.

People who reached state pension age before 6 April 2016 will continue to receive their state pension under the old rules.

Nigel Holland from Holland & Co Chartered Accountants said:

“this is a welcome development and the changes which have been introduced this year are encouraging. It is important that people know what they are entitled to. At my firm we have a web page which is dedicated to supplying information about pensions and our clients are able to access this information.  read our state pension guide 

It is intrinsically unfair that men and women should receive their pensions at different ages and over time this inequality will be corrected. Unfortunately people will have to work longer in the future to receive their pensions. However this is not necessarily a bad thing because work can be a good activity and provides exercise and focus for people who may otherwise lead uneventful dull lives.

Writing to people as outlined above should only be the first step and I urge the government to go further and write to all individuals and provide them with an estimate of how much their pension is likely to be. This information should be updated regularly.

Correspondence of this nature can be costly but the cost could be reduced substantially if the HMRC could invest in basic software which would enable them to combine different data in one report to the tax payer. 

This report could include the following:

  • An annual statement of a tax payers financial position with regard to how much tax they owe against how much has been paid
  • An estimate of how much their pension is likely to be and the date they are expected to receive it.
  • Information could be provided by HMRC to advise what a taxpayers tax payments are used for. As they do at present.

There is probably other information which can also be included in one report rather than HMRC sending out multiple correspondence to individual tax payers.” 

For more information on the changes read our state pension guide or contact us to discuss your situation