DURING & POST
The state pension
Although the government has taken steps to diminish the UK’s pension
bill in recent years, the state pension remains an important source of
income for retirees.
It pays up to £115.95 a week (for the 2015/16 tax
year) for anyone with a full record of national
insurance contributions, but you need to ensure you
have built up your entitlement over time and make
the most of it when you retire.
By deferring the state pension, you may also receive a
higher weekly amount – for every five weeks deferred,
the future weekly allowance is increased by 1 per
cent. The government is consulting to decrease this
allowance, but no plans have been finalised.
The current age at which you can claim the state
pension is 65, but the government plans to raise the
age progressively from next year.
To be entitled to the full basic state pension, 30
qualifying years of national insurance contributions
must be accumulated. If you have been working and
paying national insurance for that time, you are
almost certainly covered. National insurance credits
may have been provided for unemployment, sickness
or as a parent or carer. Equally, you can pay voluntary
national insurance contributions to top up your
qualifying years.
The state pension age for men and women will
gradually increase to reach 66 by October 2020 and
then 67 between 2026 and 2028.
Finally, it will increase to 68 between 2044
and 2046 (affecting people currently aged
38 and over).
At state pension age, you have three choices:
Stop working and claim the state pension
Continue working and claim the state pension
Key points
The state pension is probably not enough to
live on with any level of comfort, so do not
rely on it in isolation
The age you can claim it is rising from 65
now to 67 by 2028
Continue working and put off claiming the state
This latter option has some advantages. Anyone who
continues working after state pension age doesn’t
pay national insurance contributions, meaning you
get to keep more of your income.
You may not even qualify for the state
pension, so check that you are eligible and
pay voluntary contributions if you aren’t
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