UK State Pension
What is a UK State Pension?
The state pension is a weekly payment from the UK government that you receive when you reach state pension age.
To qualify for it, you must have paid or been credited with National Insurance contributions (NICs) and have reached state pension age. The amount you can claim depends on your number of contributing years.
Why has it recently changed?
After years of complaints about how complicated it is, the state pension was reformed in April 2016.
What are the new changes?
In short, the main changes to the state pension are the amount you are entitled to each week, the number of years you need to qualify for the full pension, and lastly, the option of paying full National Insurance contributions and qualify additional state pension – or alternatively ‘contracting out’.
Who is affected by the new changes?
The new changes came in to affect on the 6th April 2016, for men born on or after 6 April 1951 and women born on or after 6 April 1953.
How much is the new state pension?
The Department for Work and Pensions (DWP) has confirmed that State Pension payments will increase by 3.1% in line with the Consumer Price Index (CPI) from 11 April 2022.
The upcoming increase means that the Basic State Pension will rise to £141.85 per week (from £137.60) and the full New State Pension will go up to £185.15 (from £179.60).
How many years contributions do you need to qualify for the full state pension?
Previously, you were entitled to a full state pension after 30 years of NI contributions. However, you now need 35 years. To qualify at all, you need at least 10 years of NI payments.
For example, If you reach state pension age, and you have 14 years of contributions, you will be entitled to 14/35ths of a full state pension. Which is simply;
(£185.15 / 35 years) x 14 years = £74.06 per week
How can I build up my New State Pension before I reach state pension age?
Your new state pension will be based on your NI record when you reach state pension age. You can increase what you’ll get by adding to your NI record before reaching this age.
There are several ways to do this;
- Keep on paying NI – carry on working and paying NI contributions until you reach state pension age.
- Apply for NI credits – credits can fill gaps in your NI record.
- Pay voluntary NI contributions – you may be able to fill gaps in your NI record by paying voluntary contributions.Defer taking your pension and build up your state pension by delaying taking it.
How can I build up my New State Pension before I reach state pension age?
Yes, you are able to top your New State Pension and even back date it in some circumstances. If you would like help on this, please contact us.
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