The new State Pension

Source: HM Revenue & Customs | | 26/07/2017

The new State Pension is payable to those that reach the State Pension age on or after 6 April 2016. The full new State Pension is currently £159.55 per week and is payable to eligible women born on or after 6 April 1953 and eligible men born on or after 6 April 1951. Retirees that reached the State Pension age before 6 April 2016 will continue to receive the State Pension (not the new State Pension) under the old rules.

Claimants require 35 qualifying years of National Insurance contributions in order to receive the full new State Pension. Individuals that have fewer than 35 qualifying years when they reach State Pension age will get a pro-rata amount of the new State Pension, subject to a minimum requirement of 10 qualifying years.

A persons national insurance record before 6 April 2016 is used to calculate their ‘starting amount’. This is part of the new State Pension. The starting pension amount could include a deduction for any applicants that had previously been contracted out of the Additional State Pension.

The contribution rules changed from 6 April 2016, and there is no longer an option to be contracted out. However, readers who were contracted out in the past paid National Insurance contributions at a lower rate and this can impact upon their entitlement to the full amount of new State Pension.

It is possible to apply for a pensions forecast if you are unsure of your future entitlements to the State Pension (new or old version). Please call if you would like help organising this.

 

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