have paid enough National Insurance to qualify for the full basic state pension, but is there anything I can do now to boost my state pension above the new £144-a-week flat-rate that will come into force in 2016?
Adam Uren, of This is Money, says: This is a common question. I recently explained to another reader how to make up for missing years on your National Insurance record so you can qualify for the new flat-rate state pension, which will be worth £144 each week in today's money when it is introduced three years from now.
Currently those with 30 years of National Insurance contributions qualify for a full basic state pension of £107.45-a-week, which can then be topped up by the Second State Pension (S2P), which replaced the State Earnings-Related Pension scheme (SERPs) in 2002.
Changes afoot: The current two-tiered pension system will be replaced by a flat-rate system in 2016.
The introduction of the £144 single-tier state pension in 2016 will bring an end to S2P.
However, someone who has already built up S2P, therefore entitling them to a state pension income greater than £144-a-week, will be allowed to keep this, though they will not be allowed to build up any extra post-2016.
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When the flat-rate pension comes into force, to get the full £144-a-week you will have to have earned above the National Insurance lower earnings threshold (currently £5,564) for 35 years.
But anyone who has earned less than this threshold can make voluntary National Insurance payments to make up for any years they have missed in the last six years.
But is there anything you can do to build up extra S2P so you can get more than £144-a-week in 2016?
Not unless you get a payrise.
HOW THE S2P IS CALCULATED
Anyone entitled to S2P gets at least £1.75-a-week (£91-a-year) for each year spent in the scheme, with this amount rising depending upon how much you earn between £15,000 and £40,000.
So someone who works for 45 years, accruing the minimum £1.75-a-week, would build up an S2P entitlement worth £4,090-a-year, or £78.75-a-week. This, when added to the basic state pension, would see them receive £186.20-a-week in retirement.
Anyone who earns between the lower National Insurance threshold of £5,568 and £15,000 are treated as if they are earning £15,000 for S2P purposes, thanks to a Labour government change to ensure the lowest-earners can build up S2P.
Someone who earns £40,000-or-above meanwhile will be able to build up the maximum amount of S2P for those years they are earning at that level.
How much you accrue in S2P is linked to how much you earn and for how many years you have been paying National Insurance.
The amount you get depends where you are on the scale of earnings between £15,000 and £40,000, so someone on a salary of £35,000 would build up more S2P than someone on £20,000.
Unlike the basic state pension, you can't make extra contributions to build up S2P.
So the only way you can earn larger S2P entitlements prior to 2016 would be by getting a payrise (provided you earn below £40,000, which is when you start accruing the maximum amount of S2P).
The DWP says that currently, the average amount built up in S2P is worth £28-a-week of state pension, so the average state pension would be £135.40-a-week.
The Department for Work and Pensions has a state pension calculator which you can use to figure out how much you can expect when you come to retire.
You can boost your state pension income by deferring it. The Government increases your state pension income by 10.4 per cent for every year you put off taking it.
And while you can't pay any extra into S2P, you can always increase your contributions into your private pension, or other saving and investment vehicles you have in place for retirement.