The State Pension is changing. If you reach State Pension Age after April 5, 2016 you will be entitled to the New State Pension. The full amount payable is £155.65 per week (2016/17) and each year it will be increased in line with prices (CPI). But not everyone will get the full New State Pension as it depends on whether you've paid full-rate National Insurance Contributions for 35 years.
1. You cannot receive your New State Pension before your State Pension Age. Check your State Pension Age by using the online tool on the Gov.UK website.
- By November 2018 State Pension Ages equalise at age 65 for men and women
- By October 2020 State Pension Age increases to age 66.
2. Check your UK National Insurance Contributions record
- You need 10 qualifying years to get any new State Pension
- You need 35 years to get the full State Pension
- You can get a record of your National Insurance Contributions from HMRC
3. Ask for a New State Pension statement
- If you are aged 50 or over you can request a New State Pension statement
- Ring 0345 3000 168 or go online to the Gov.UK website
4. Think about paying voluntary National Insurance Contributions if you have gaps in your National Insurance Contributions record to increase your New State Pension. You need to do this before your State Pension Age.
- National Insurance credits as a parent carer, for unemployment and sickness count towards the new State Pension.
5. You may have been contracted out of the earnings related part of the previous State pension system if you’ve been in a workplace pension or saved in a personal pension, and paid lower National Insurance Contributions.
- This means you won’t get the full New State Pension, but your private pension will be increased
- Most earnings related pension schemes, including public sector and local authority schemes were contracted out.
6. You can’t inherit your spouse’s or civil partner’s New State Pension.
- In some circumstances you may be able to inherit an extra State Pension if you’re widowed.
7. If you get divorced you will still keep your New State pension.
8. You can increase your New State Pension if you defer payment by at least nine weeks.
- Your State pension increases by 1 per cent for every 9 weeks deferred
- That's 5.8 per cent for a full year.
9. If you're self-employed you will also be entitled to the New State pension based on your National Insurance Contributions records.
10. To improve your retirement income think about starting or increasing your private pension contributions. Use our 5 top tips for boosting pension savings here.
Kate Smith from Aegon who compiled these tips, says: “For many, the State Pension is the bedrock of their retirement income and with the state pension age increasing, it is fundamental that people know exactly when, and what they will receive from the government. New pensioners reaching State Pension Age on or after 6 April 2016 are likely to receive significantly different amounts from each other depending on their National Insurance contribution record and whether they’ve been saving into a particular type of workplace scheme.
"From age 50 people can find out how much they are entitled to by requesting a New State Pension Statement but for all, leaving it too late could leave a massive hole in retirement income.”
You can find out more on the Government's website here.
- There are more money-saving tips in every issue of Yours magazine, out every fortnight on a Tuesday.