State pension is a non-means tested benefit, paid by the UK government from state pension age onwards. Non-means tested means that any other income or savings you have do not alter the amount of state pension that you get.
What age is State Pension paid from?
State pension age used to be age 65 for men and age 60 for women, but since April 2010, the state pension age for women has gradually been increasing to the same age as men – age 65. This was viewed as very unfair to the women who were affected, as they were not given much notice to change their retirement plans. From December 2018 to October 2020, state pension age for both men and women will gradually increase from age 65 to age 66.
A further increase in state pension age from 66 to 67 is then scheduled from April 2026 to March 2028, with another increase from 67 to 68 now expected to be brought forward to between 2037 and 2039. Further increases are also likely, with the assumption that people currently in their 20s may have to wait until age 70 to receive their state pension.
How much is it?
The government is trying to simplify the state pension, and introduced a flat rate state pension of £164.35 per week (2018/19 tax year figure) in April 2016. To qualify for the full flat rate state pension, you now need 35 qualifying years, which is years when you either earned enough to exceed the Lower Earnings Threshold for National Insurance (NI) contributions (currently £116 per week) or earned NI Credits from receipt of certain state benefits, for example child benefit, jobseekers allowance or carer’s allowance.
Previously, state pension was made up of the basic state pension (currently £125.95 per week) plus additional state pension (previously termed S2P or SERPS). Since April 2016, everyone has been automatically switched onto the new flat rate state pension, but anyone with a substantial amount of additional state pension that would leave them better off than £164.35 per week, has been able to retain the higher amount.
Some people will have “contracted out” of additional state pension, either by choice or by being a member of a workplace pension scheme. These people may not now qualify for the full flat rate state pension, even if they have the full 35 years NI record.
State pension increases every April, currently in line with what is known as the “Triple Lock” – the higher of the increase in National Average Earnings, inflation as measured by CPI or 2.5%. There is concern that this is unaffordable long-term, but it is politically very difficult to remove – older people being more likely to vote.
How can I check my State Pension?
There are a number of ways you can request a State Pension forecast:
• Online, at https://www.gov.uk/check-state-pension.
• By telephone – DWP (Department of Work & Pensions) 0800 7310175 Mon – Fri 8am – 6pm
• By post using form BR19 – available at https://www.gov.uk/government/publications/application-for-a-state-pension-statement
Please note that there have been some issues with the accuracy of State Pension forecasts, where DWP have not been provided with the correct details for people who were contracted out into workplace pension schemes. These issues are due to be resolved by the end of 2018.
We are always available to discuss any queries or concerns, so just call or drop us an e-mail.
The area of state benefits is not regulated by the Financial Conduct Authority (FCA).