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State Retirement Pension

Did you know about the New State Pension?

You can claim your State Pension when you reach State Pension age.  State Pension age is different for men and women (but this is changing) and depends on your date of birth. You can check when you will reach State Pension age on the gov.uk website:

https://www.gov.uk/calculate-state-pension

For those who reach State Pension age from 6th April 2016 onwards there is a new State Pension.

The new rules affect men born on or after 6th April 1951 and women born on or after 6th April 1953.

If you reached State Pension age before 6th April 2016, your State Pension will be calculated based on the old rules.

What are the differences between the old and new State Pension schemes?

Under the old State Retirement Pension scheme rules, your State Pension can be made up of:

1. a basic State Pension, based on your National Insurance record and

2. for some people, an earnings-related additional State Pension (also referred to as state second pension or SERPS).

 

The new State Pension is simpler because it is a flat-rate pension, based on your National Insurance (NI) record alone; not based on earnings.

The number of qualifying years on your NI record you need to get the maximum new State Pension is 35. Under the old scheme you needed 30 years. You need a minimum of 10 qualifying years to be entitled to any new State Pension.

You pay NI contributions when you work and earn over a certain amount and you can be ‘credited’ with NI contributions when you are unemployed, or cannot work due to illness or disability, or you are a carer or you get Child Benefit for a child under 12 (or under 16 before 2010).

The new State Pension is an individual entitlement, this means that in general you will not be able to claim on your spouse or civil partner’s contributions at retirement or if you are widowed or divorced.

For more information on the new State Pension you can visit the gov.uk website:

https://www.gov.uk/new-state-pension

I have not reached State Pension age yet - can I find out how much my State Pension might be?

Yes, you can request a State Pension Statement to get an estimate on what you could be entitled to, based on your NI record to date. You can also find out if you have any gaps in your National Insurance record; it is possible to pay voluntary contributions to fill the gaps, but you should get advice to check if it is worth doing this. Or you may be eligible for credits. See the gov.uk webpage for more information.

https://www.gov.uk/state-pension-statement

How is the new State Pension calculated?

The full new State Pension (for 35 or more qualifying years) is £159.55 per week in 2017/18. The amount you will be entitled to will be based on the number of qualifying years on your NI record.

So that nobody loses out due to the change, when your entitlement is calculated, there will be a ‘starting amount’ which will be based on your NI record as at 5th April 2016. The Pension Service will work out:

  • the amount you would have been entitled to under the old scheme
  • the amount you would have got if the new scheme had been in place at the start of your working life.

Your ‘starting amount’ will be the higher of these two amounts.

Some people may have a starting amount which is more than the full new State Pension due to the basic and additional pension they have built up. The extra will be paid on top of the full new State Pension and will be protected.

If your starting amount is less than the full new State Pension, you may be able to build up more pension for any qualifying years of contributions or credits between 6th April 2016 and when you reach State Pension age. No further amounts will be added once you reach the full new State Pension amount, or when you reach State Pension age, whichever happens first. 

If you have been ‘contracted out’ of the state scheme at any time in your working life the amount you receive under the new state pension may be reduced. Your starting amount will be reduced because under the contracted out scheme, you would have paid lower NI contributions - or some of the NI contributions you paid were used to contribute to your stakeholder or personal pension instead of the additional State Pension.

For more information on the new State Pension you can visit the gov.uk website:

https://www.gov.uk/new-state-pension

What if I don’t qualify for any State Pension or less than the full State Pension?

Depending on your circumstances and any other income or savings, you may be able to claim Pension Credit.

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