Do you qualify for a UK State Pension?
Free bus pass, Senior Railcard, free TV license, NHS benefits, winter fuel payment, Christmas bonus… There are plenty of benefits and perks for retirees. But do you know exactly how much weekly pension you’ll receive? Or from what age you can claim it? Or even if you’re entitled to it in the first place?
Some basics surrounding the State Pension:
- The State Pension age is changing. From December 2018, it’s 65 for both genders, and between January 2019 and October 2020, it will rise to 66.
- You can claim the basic State Pension if you’re a man born before 6 April 1951 or a woman born before 6 April 1953. If you were born later, you’ll need to claim the new State Pension instead.
- Entitlement to the basic and the new State Pension is dependent on your National Insurance contributions.
- The full rate of the new State Pension will be no less than £151.25 a week. But not everyone will get the same amount. In the early years of the new State Pension your NI record from the old scheme will be taken into account.
- Your National Insurance record before 6 April 2016 is used to calculate your ‘starting amount’. This is part of your new State Pension. Your starting amount will be the higher of either:
- the amount you would get under the old State Pension rules (which includes basic State Pension and Additional State Pension);
- the amount you would get if the new State Pension had been in place at the start of your working life.
- Your starting amount will include a deduction if you were contracted out of the Additional State Pension (because you were in a certain type of workplace, personal or stakeholder pension).
- You’ll usually need at least 10 qualifying years on your National Insurance record to get any State Pension. You’ll need 35 qualifying years to get the full new State Pension. However, you’ll get a proportion of the new State Pension if you have between 10 and 35 qualifying years.
The current State Pension system is complicated which makes it difficult to factor it into your retirement budget. Nevertheless, it’s not going to be a throwaway part of your retirement income, so it’s worth doing your sums and making sure you don’t miss out. It’s literally going to be a matter that will affect you the rest of your life.
But what if you’re focused on paying the mortgage and school fees, and your dream of retiring and sailing around the Aegean Sea just seems a ways off? Fair enough. Being a pensioner isn’t something I gave much thought to either, until I spent time with some elderly relatives who impressed on me the importance of getting everything straightened out as early as possible, so I’m not playing “catch up”.
There are plenty of options around your State Pension, including National Insurance credits, voluntary contributions, contributions while living and working abroad, lump sum encashment, annuity schemes…
Sit down with our expert advisors to get advice and help with your pension planning, your working options and start planning for the retirement you want.