Emma Wall: We know that the majority of readers of Morningstar.co.uk are investing for retirement. This is fantastic. Preparation is key when it comes to long-term investing. But it's important that you consider all elements of retirement income and the State Pension is one of these. A lot of people assume that they will automatically get the State Pension. But like any other pension pot, you need to contribute to be able to withdraw.
With the State Pension, you need to make 30 years of National Insurance contributions. This means that if you have taken a break from work, for example, to raise children, you may not be automatically qualified for the State Pension. However, you can make up these years and go back and contribute those National Insurance payments in order to make sure that you get the State Pension.
There is also some benefit in deferring it. If you are retiring before April, 2016, that is you reach State Pension age before then, deferring State Pension can mean that you get as much as 10% more for every year that you defer.
That means, for example, if you retire with an income from your State Pension of £8,000, deferring for just five years could mean that it goes up to £12,000 a year. However, after April 2016 there will be a new type of pension which will not benefit from this increase. There will be some benefit from deferring, but not as much as this.