A basic state pension is available to most people in the UK. To claim it, you will have had to reach the state pension age, which can vary depending on when you were born. For those about to retire now, the age is 65 years, but this is about to be increased to 66 in October 2020.
Four months before you reach the state pension age, you will get a letter from the Pension Service telling you how to claim your pension. If you are already receiving certain benefits there might be no need for you to claim at all.
Some people, who might keep working or have other sources of income, decide to defer their state pension, putting it off either to receive one large lump-sum or a larger weekly state pension income when they eventually claim it.
Who can get it?
Most people will have the right to some form of the basic state pension, and some will have the possibility of getting additional state pension. The state pension is based on how many years you contributed to National Insurance. In order to get a full basic state pension, most people need to have 30 years of qualifying years, but for some people it can be more.
Those who have between 25% and 100% of their necessary years will get some income, ranging from £26.86 to £107.45 per week.
For those who do not have all their required qualifying years, there are some things that can still be done. On option is to work longer, which helps you fund your own personal pension savings as well as add additional years of National Insurance contributions that could qualify you for the full state pension. You could also make a voluntary contribution to qualify, if you have the money.
There are some planned changes to the state pension system already. The current law says that the state pension age should rise to 67 between 2034 and 2036 and 68 between 2044 and 2046. However, the government has expressed desire to raise the age to 67 quicker than that, between 2026 and 2028. This has yet to be approved by parliament.
The amount of money pensioners receive each week is also changing with the times, with the government raising it again for the 2012-2013 tax year just a month ago. Along with the increase, they also got rid of the tax credit pensioners previously enjoyed, so that age-related tax allowances will not be available for new pensioners in the future. The state pension is a foundation and a safety net, but most experts agree that to retire comfortably it’s very desirable to also have some private pension savings.
Leo Jhumunen from www.pensioncalculator.org writes about the state pension and other pension-related news.