Common State Pension Mistakes to Avoid

1. Not Claiming NI Credits You're Entitled To

The Mistake

Many people don't realize they're entitled to National Insurance credits for:

• Caring for children (even without claiming Child Benefit)
• Caring for disabled or elderly relatives
• Being unemployed (without claiming Jobseeker's Allowance)
• Being ill or disabled

Cost: Could be worth up to £342/year in State Pension for each missing year

How to Avoid It

• Check your NI record regularly at gov.uk/check-national-insurance-record
• If you see gaps for years you were caring or unemployed, apply for credits
• Apply for Specified Adult Childcare credits if you cared for children under 12
• Apply for Carer's Credit if you cared for 20+ hours/week
• Credits can be backdated, but it's easier to claim them at the time

Read our full guide to NI credits

2. Not Transferring Child Benefit Credits

The Mistake

Child Benefit gives automatic NI credits to the person who claims it. But if that person already has 35 qualifying years, those credits are "wasted."

Example:

• Dad works full-time and has 35 qualifying years
• Mum stayed home and only has 15 qualifying years
• Child Benefit was claimed in Dad's name
• Result: Dad gets credits he doesn't need, Mum misses out on 10+ years of credits

Cost: Could reduce Mum's State Pension by up to £3,420/year (10 years × £342)

How to Avoid It

• Check both partners' NI records
• If one partner has 35+ years and the other doesn't, transfer the Child Benefit credits
• Use form CF411A to transfer credits
• Can be done retrospectively for recent years (within 2 years of end of tax year)

3. Missing Voluntary Contribution Deadlines

The Mistake

You can normally only fill gaps from the last 6 tax years. There's currently an extended deadline (until 5 April 2025) to fill gaps from April 2006 to April 2017 - but many people don't know about it.

Cost: After 5 April 2025, those years become un-fillable forever

How to Avoid It

• Check your NI record before 5 April 2025
• If you have gaps between 2006-2017 that would increase your pension, fill them before the deadline
• Remember to check your forecast first to confirm filling gaps will actually help
• For recent years, don't wait - fill gaps within 6 years or they expire

Read our guide to filling gaps

4. Paying to Fill Gaps That Won't Help

The Mistake

Paying £923 per year (Class 3) to fill gaps when:

• You already have 35 qualifying years (won't increase your pension)
• Your forecast says filling gaps won't help due to contracted-out deductions
• You're planning to retire abroad in a country with frozen pensions

Cost: £923+ per year with no benefit

How to Avoid It

• Always check your forecast first at gov.uk/check-state-pension
• The forecast explicitly tells you if filling gaps will increase your pension
• Use our Voluntary NI Calculator to check if it's worthwhile
• If in doubt, call the Future Pension Centre (0800 731 0175) before paying

5. Retiring Abroad to a Frozen Pension Country

The Mistake

Retiring to Australia, Canada, South Africa, New Zealand, or other countries where UK State Pension is frozen (doesn't increase annually).

Cost: Over 20 years, could lose £50,000+ compared to living in a country with uprating

Example:

• Claim State Pension at £230.25/week in 2025
• Move to Australia (frozen)
• 20 years later (2045), still receiving £230.25/week
• If you'd stayed in UK or moved to an uprated country, could be receiving £400+/week by 2045

How to Avoid It

• Before retiring abroad, check if the country has pension uprating
• Countries with uprating: EU/EEA, USA, Switzerland, Barbados, Israel, Jamaica, Philippines, and others
• Countries without uprating: Australia, Canada, South Africa, New Zealand, India, and many others
• Consider this when choosing where to retire
• If moving to a frozen country, factor this into retirement planning (you'll need other income sources)

Read our guide to claiming State Pension abroad

6. Not Checking Your Forecast Regularly

The Mistake

Assuming your State Pension forecast is correct without checking it, or checking it once years ago and never again.

Problems this can cause:

• Missing NI credits don't appear on your record
• Errors in your NI record go unnoticed
• You don't realize you have gaps until it's too late to fill them
• You over-contribute because you don't know you already have 35 years

How to Avoid It

• Check your forecast at least once a year
• Check after major life events (having children, divorce, periods of unemployment or caring)
• Check 10 years before State Pension age, then annually thereafter
• If you spot errors or missing credits, contact HMRC immediately

7. Opting Out of Workplace Pensions to Avoid NI

The Mistake

Opting out of auto-enrolment workplace pensions or asking employers to pay below the Lower Earnings Limit to avoid National Insurance.

Cost:

• Lose qualifying years toward State Pension
• Lose employer pension contributions (free money)
• Lose tax relief on pension contributions

How to Avoid It

• Stay enrolled in workplace pensions - the benefits far outweigh the NI cost
• Ensure you earn above £6,396/year (2025/26) to get a qualifying year
• If you have multiple part-time jobs, check if combined earnings count

8. Assuming Marriage Means Automatic Pension

The Mistake

Under the new State Pension (from 6 April 2016), many people wrongly believe that getting married means they can claim based on their spouse's NI record.

Reality:

• New State Pension is based entirely on your own NI record
• Marriage doesn't give you any automatic entitlement to State Pension
• Both partners need their own qualifying years

How to Avoid It

• Both partners should check their own NI records
• If one partner has gaps, look for ways to fill them (credits, voluntary contributions)
• Consider transferring Child Benefit credits if beneficial
• Plan for Pension Credit if one partner will have low State Pension

9. Not Claiming Bereavement Benefits in Time

The Mistake

After a spouse or civil partner dies, you must claim Bereavement Support Payment within strict deadlines:

• Within 3 months for full payment (lump sum + 18 months of monthly payments)
• Within 21 months for reduced payment
• After 21 months, you get nothing

Cost: Up to £3,500 (lump sum) + £350/month for 18 months = over £9,000 total

How to Avoid It

• Contact the Bereavement Service on 0800 731 0469 as soon as possible after bereavement
• Don't assume you're not eligible - let them check
• Also ask about inherited State Pension rights

10. Deferring Without Understanding Break-Even

The Mistake

Deferring State Pension for years without calculating whether you'll live long enough to benefit.

Example:

• Defer for 5 years to get 28.89% increase
• Give up: £11,973/year × 5 = £59,865
• Gain: £3,459/year extra pension
• Break-even: 17.3 years after starting to claim
• If you defer from 66 to 71, you need to live to age 88+ to benefit

How to Avoid It

• Use our Deferral Calculator to see break-even points
• Consider your health and life expectancy realistically
• Shorter deferrals (1-2 years) have more reasonable break-even points
• Don't defer if you need the income now

Read our guide to deferring

11. Ignoring State Pension in Divorce Settlements

The Mistake

Not considering State Pension as part of divorce financial settlements, especially when one partner has significantly more qualifying years than the other.

Cost: Could be missing out on pension sharing worth thousands per year

How to Avoid It

• Include State Pension in divorce financial discussions
• Both parties should get State Pension valuations
• Consider a Pension Sharing Order if there's a significant imbalance
• Get legal advice to ensure pension rights are protected

12. Missing the Small Earnings Exception

The Mistake

If you're self-employed with profits below £6,725/year (2025/26), you don't have to pay Class 2 NI - but this means you don't get a qualifying year.

Some people opt out to save £182/year, not realizing they're losing a qualifying year worth £342/year in State Pension.

How to Avoid It

• If self-employed with low profits, voluntarily pay Class 2 NI (£182/year)
• This gives you a qualifying year
• Worth it for the extra £342/year in State Pension
• Can be done through Self Assessment tax return

13. Not Understanding Contracted-Out Deductions

The Mistake

Being surprised that even with 35 qualifying years, you're not getting the full State Pension due to contracted-out deductions.

What happened:

• Before April 2016, some workplace pensions were "contracted out" of State Second Pension
• You paid lower NI in exchange for giving up part of State Pension
• This results in a deduction from your new State Pension

How to Avoid It

• Check your forecast - it will show if you have contracted-out deductions
• Understand that you can't fill this gap with voluntary contributions
• Factor this into retirement planning
• You may have a good workplace pension that compensates for the reduction

14. Claiming Too Early (Before 4 Months)

The Mistake

Claiming State Pension too early (more than 4 months before State Pension age) or too late (after you reach it).

Problems:

• Claims made too early are rejected - wasted effort
• Claims made late mean you miss out on payments (they can only backdate 12 months maximum)

How to Avoid It

• Claim 4 months before your State Pension age
• Set a reminder so you don't forget
• Use our State Pension Age Calculator to find your exact claiming date
• If you miss it, claim as soon as possible - you can backdate up to 12 months

15. Falling for State Pension Scams

The Mistake

Responding to scam offers that promise to:

• "Unlock your State Pension early" (impossible - minimum age applies)
• "Increase your State Pension with a secret loophole" (no such thing)
• "Review your pension for a fee" (official forecast is free)
• Claims that you're owed money and need to pay a fee to release it

Cost: Loss of money paid to scammers, potential identity theft

How to Avoid It

• Never pay fees to check or claim your State Pension
• All official services are free
• Only use official government websites (gov.uk)
• DWP will never call and ask for payment or bank details
• If contacted unexpectedly, hang up and call the official number yourself
• Report scams to Action Fraud: 0300 123 2040

Protecting Your State Pension

Annual Checklist

Do this every year, especially in the 10 years before State Pension age:

1. Check your State Pension forecast
2. Check your NI record for gaps or errors
3. Check if you qualify for any NI credits
4. Consider filling gaps if beneficial (and before deadlines expire)
5. Review whether you're on track for the 35 years needed

Before Major Life Events

• Retiring abroad: Check uprating rules for destination country
• Divorce: Include State Pension in financial settlement
• Leaving employment to care: Apply for NI credits
• Becoming self-employed: Understand NI obligations
• Reaching State Pension age: Claim 4 months before

Key Resources

• Check your State Pension forecast
• Check your NI record
• Learn about NI credits
• Learn about filling gaps
• Future Pension Centre: 0800 731 0175