Warning over DWP mistakes that could reduce the size of your state pension

As an increasing number of Britons make private arrangements for their retirement, the state pension continues to be a lifeline, currently valued at £221.20 per week. This annualises to £11,502.40 and is anticipated to notch up to just shy of £12,000 next April.

According to the findings by the Pensions and Lifetime Savings Association (PLSA), an individual requires £14,400 annually for a "basic" retirement. Therefore, the full state pension provides 80% of this amount. For couples, the PLSA calculates a basic yearly requirement of £22,400—easily met if both are on full state pensions.

But ambitions for a "moderate" retired life change the scenario, with singles needing £31,300 and couples £43,100 per year, where the future state pension will constitute only 37% to 53% of the necessary funds. Aiming for a "comfortable" retirement, per PLSA figures, would mean annual sums of £41,300 for singles and £59,000 for couples, far surpassing what the state pension can provide.

Even so, the state pension remains key for many older citizens. Attaining the full state pension requires contributing 35 qualifying years of National Insurance records - however, you must have a minimum of ten to receive any pension at all.

Simple errors can result in you not receiving everything you're entitled to, potentially leading to financial difficulties later on. Here are the most common mistakes to avoid.

Not claiming child benefit

If you're responsible for a child under 16 (or under 20 and in approved education), you're eligible for child benefit, designed to assist with family-raising costs. However, it's crucial to understand that claiming this benefit also provides you with National Insurance Credits.

This means that a stay-at-home parent can still accumulate their state pension entitlement and could receive up to 12 years' worth of credits. It also offers a boost for part-time working parents who don't earn enough to pay NICs.

The high-income child benefit charge often deters people from claiming; if either partner earns over £50,000, you must complete a tax return and start repaying some of the child benefit payments. If the higher earner makes over £60,000, they have to repay all of it.

However, you can claim to get the NI credits and simply opt not to receive the payments, avoiding these issues. Claimants automatically receive National Insurance credits if they claim Child Benefit and have a child aged under 12. If you don't need the National Insurance credits, you could transfer them to your spouse or partner.

Alternatively, you could apply for Specified Adult Childcare credits for a different family member who provides care for your child. There are numerous other benefits that automatically grant you NI credits, making it crucial to claim anything you might be entitled to.

These include Jobseeker’s Allowance, Employment and Support Allowance, Unemployability Supplement, Maternity allowance, Carer’s Allowance, Income Support, Carer Support Payment (Scotland only), Working Tax Credit, and Universal Credit. However, there are some benefits or situations where you are entitled to NI credits if you need them, but these aren’t given automatically, and you need to apply.

Failure to do this could result in costly gaps on your record. These include being unemployed and looking for work but not on Jobseeker’s Allowance, being on Statutory Sick Pay and not earning enough to make a qualifying year, being on Statutory Maternity, Paternity or Adoption Pay, or Additional Statutory Paternity Pay, and not earning enough to make a qualifying year. It also includes being a foster carer, or a kinship carer in Scotland, caring for one or more sick or disabled person for at least 20 hours a week, being over 18 and on a government-approved training course that lasts no longer than 1 year but you were not sent by Jobcentre Plus, and being on Jury Service and not self-employed.

If you're married to or in a civil partnership with a member of the armed forces and accompanied them on an overseas posting after 6 April 2010, or if you went with your partner on an overseas posting after 6 April 1975, reach state pension age on or after 6 April 2016, and are not receiving Class 1 credits, you may be eligible for certain benefits. Similarly, if you were wrongly imprisoned and your conviction was quashed by the Court of Appeal (or the Court of Criminal Appeal in Scotland), you might also qualify.

If you're on Working Tax Credit, you could automatically receive credits, but it's essential to check your record to ensure they've been applied. In most cases where you need to claim, you should write to PT Operations North East England, HM Revenue and Customs, BX9 1AN, United Kingdom, including your National Insurance number and specifying when the credits are for and why you're eligible.

If you've applied for all the credits you're entitled to and your record is still not full, you can make voluntary payments to fill the gaps. Information on how to do this can be found here.

You might have missing years if you were employed but had low earnings, unemployed and not claiming benefits, self-employed but did not pay contributions due to small profits, or living or working outside the UK. It's crucial to only fill in missing years of National Insurance contributions if you're unlikely to have enough by the time you reach state pension age. If you're below State Pension age, you can check your State Pension forecast to see if paying voluntary contributions would be beneficial and how much they would cost.

Typically, a one-year gap is worth 1/35 of the full pension rate. At this year's rates, that equates to £6.32 per week, £328 per year, or just over £6,500 across 20 years for every one-year gap that you fill. It's advisable to check for gaps now, as the rules on how many years you can fill change from April 6. Currently, you can go back to 2006, but after then you will only be able to pay for the previous six years.

A series of government errors have resulted in hundreds of thousands of people receiving less state pension than they should have been. Women have been most affected, but anyone can be impacted.

The main categories include: People who took time off work due to caring responsibilities between 1978 and 2010; women who reached state pension age before 2016; women who divorced their partners after reaching state pension age; widows whose husbands died after March 17, 2008; anyone aged over-60; Heirs and widows of people in the categories above; anyone who is getting less than £93 a week in state pension.