Millions of people will see their State Pensions change next month in an annual shake-up to the system.
It’s never too early to start planning ahead for retirement, and with alterations on the way in a couple of weeks, it’s key to know what to expect.
One of the main changes will be regarding the State Pension age, with the UK government currently in the process of increasing it from 66 to 68 in the coming years, reports the Daily Record.
The State Pension age is the earliest age Brits can start receiving their State Pension, which may be different to the age people can get a workplace or personal pension.
Other upcoming changes involve National Insurance payments, with a minimum of 10 years National Insurance contributions needed to receive any amount of State Pension.
State Pensions are also set to increase by 3.9 per cent – the biggest boost since 2012.
State Pensions can be claimed when a person reaches their official State Pension age and depends on a person’s gender and date of birth but generally, people will be able to receive their State Pension from 65.
State Pensions are paid directly into a claimant’s bank account once they reach the qualifying State Pensions age. The payments are an essential lifeline for many, topping up retirement funds.
What are the State Pension changes next month?
From May 6, 2020, anyone who was born between July 6, 1954 and August 5, 1954 will reach State Pension age.
Since December 2018, the State Pension age for both men and women has been rising and in October this year, the age for claimants to receive State Pension will be 66.
Then, under the Pensions Act 2014, the State Pension age for men and women will rise to 67 between 2026 and 2028.
Some people have started to ask if their State Pension is safe due to the ongoing coronavirus pandemic, however, the State Pension is unaffected and will continue to be paid as normal.
What age will I get my State Pension?
The earliest you can get a State Pension is when you reach State Pension age.
You are eligible for the BASIC State Pension if you were born before:
- April 6 1951, if you’re a man
- April 6 1953, if you’re a woman
You are eligible for the NEW State Pension if you were born on or after:
- April 6 1951, if you’re a man
- April 6 1953, if you’re a woman
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The new State Pension will be paid into the claimant’s bank account every four weeks.
The actual amount people will receive depends on their National Insurance records. A minimum of 10 years of contributions will be needed to receive any amount and this will increase if the claimant has more years accumulated.
There is a “full” amount under the new State Pension rules which states that if a person has 35 years of National Insurance contributions, their payment could be as high as £175.20 per week.
This equates to just over £9,000 a year which will be paid in monthly instalments.
You don’t have to receive State Pension when you reach state pension age, you can defer payment – this could increase the amount you get when you decide to claim it. However, any extra payments you get could then be taxed.
You do not get your State Pension automatically, it has to be claimed, you can do this:
- Over the phone
- Download the State Pension claim form and send it to your local pension centre
- Claim from abroad – there are different rules for this which you can find here
Check your State Pension to calculate how much money you’ll get on the gov.uk website here.
-- to www.walesonline.co.uk
