Like the state pension age, the state pension seems to constantly be in a state of change. Due to the extended life expectancy figures for both men and women, the retirement age for the UK has increased to age 66, with those drawing from private pensions able to do so at age 55. In accordance with this increase, the state pension amount has also increased with the new maximum State Pension payment being £179.60 per week.
If you are wondering just how much State Pension you will get, the amount that you receive depends on your national insurance contributions and national insurance credits.
Check Your State Pension Age
To find out exactly when you can begin drawing from your state pension, you can use the Government’s State Pension calculator to find out your State Pension age. Additionally, you can Check your State Pension forecast to find out how much money you’ll get. You can also request a State Pension statement online on the Check your State Pension page of the Gov.UK website.
How can you receive the maximum amount of the State Pension? If you have paid enough national insurance contributions or received national insurance credits for a total of 35 years, you will be entitled to receive the maximum amount of the State Pension and you could also receive additional amounts including a Christmas bonus of £10 each year.
If you have not worked and contributed to the national insurance contributions or received national insurance credits for a total of 35 years, your state pension entitlement will be reduced by one thirty-fifth for each year that is missing from your national insurance record. To bridge this gap, you are allowed to pay voluntary national insurance contributions and increase your entitlement.
How To Increase Your State Pension Earnings
There are some ways to increase your state pension earnings. The State Pension will increase every year by whichever of the following is the highest:
Earnings- the average percentage growth in wages in Great Britain.
Prices- the percentage growth in prices in the UK, as measured by the Consumer Prices Index (CPI) 2.5%.
How Much State Pension Will I Get?
One question that is typically on the minds of anyone nearing retirement age for the UK is ‘How much state pension will I get?’ While there are many factors surrounding eligibility, how the state pension is paid, and whether you will need to pay tax on your state pension, the full basic state pension is an unwavering figure.
The full basic State Pension is £137.60 per week, however, there are some ways in which you can increase your State Pension up to or above the full amount. There are different rules if you live abroad.
How The State Pension Is Paid
The way in which the state pension is paid is based on your National Insurance number. The last 2 digits of your National Insurance number determine the day that your State Pension will be paid on. This has been done to help alleviate much of the administrative overload of paying everyone’s state pension on the same day.
The basic State Pension is paid every 4 weeks into a bank or financial institution account of your choice. Payments are typically made ‘in arrears’, which means pensioners are paid for the last 4 weeks, not for the upcoming 4 weeks.
Here is how the State Pension is paid based on the last 2 digits of your National Insurance number:
00 to 19 Monday
20 to 39 Tuesday
40 to 59 Wednesday
60 to 79 Thursday
80 to 99 Friday
Once you reach the State Pension age, your first state pension payment is typically made at the end of the first full week. However, if you decide to defer your State Pension, your first payment will be paid at the end of the first full week when you start getting your pension.
Some examples of this include:
If you reach State Pension age on Monday 16 June 2021 and your first payday is a Friday. The first full week ending on a Friday after the Monday you reached State Pension age is Saturday 21 June to Friday 27 June. Because this is less than one full week, you will not be paid between 16 June and 21 June.
What Is The Retirement Age For The UK?
Recently, the retirement age for the UK has increased. The new State Pension Age is 66 and experts say that number could increase even more soon. After more than a decade of increases in the qualifying age for the State Pension, both men and women in the UK will have to wait until they are 66. When compared to just a decade ago, when women could claim their state pension at 60 and men qualified at 65, the new retirement age has brought qualifying for both sexes ages in line.
Why the increase in retirement age for the UK? Officials state that the increase is a direct result of our growing life expectancy. In contrast, when the state pension was introduced in 1908, the pay-out wasn’t received until the age of 70. However, at the time, life expectancy at birth was 40 years for men and 43 for women, with only 24% of people reached state pension age. Even then, those who reached state pension age would only claim it for nine years.
By 2017, 85% of people were reaching the state pension age and the typical life expectancy for those who did was another 24 years. This doesn’t, however, take into account the differences in life expectancy between people from different regions, occupations, and social groups.
More Increases In The Retirement Age For The UK Are Planned
There are plans to move the retirement age for the UK to 67 gradually between 2026 and 2028; a further rise to 68 is due to be phased in between 2044 and 2046.
Private Pension And Early Retirement
Now, that’s not to say that you can’t retire sooner. Most private pensions allow you to draw on from the age of 55. This means that you can retire at 55, draw from your private pension, then, beginning at age 66, begin receiving the state pension.
Who Will Receive The State Pension?
The state pension payment is typically paid to anyone who has made at least 10 years’ worth of national insurance contributions during their working lifetime. The amount you receive is dependent on the number of years you have contributed with the maximum payment being £175.20 a week.
What Is The State Pension Age?
Many people are confused when it comes to the state pension age here in the UK. This is generally because the retirement age in the UK has changed quite often over the past decade and experts say that more changes are on the horizon. So, what is the state pension age in the UK?
The current retirement age in the UK is 66, but men retire at 64.7 years old on average, while women leave work at 63.6 years old. These numbers are up from just a couple of years ago, in 2018, when women saw a dramatic increase in their pension age from 60 to 65. However, in October of 2020, both sexes saw the state pension age increase to age 66.
Our Life Expectancy Has Increased
Officials say that the increase was not a budgetary one, but that it was based on the fact that our life expectancy has increased which called for an adjustment in the State Pension Age. This adjustment is to compensate for the life expectancy increase and provide a better quality of life for pensioners. Those able to collect a private pension can still do so at age 55, and still collect the state pension once they reach age 66. They also have the option to continue working as employers are no longer able to force employees into retirement at 55.
You might be wondering when you can claim your State Pension. Since the increase in state pension age from 65 in November 2018, to 66 in October of 2020, claiming your State Pension now depends on when you were born.
Check Your State Pension Age
To find out exactly when you can begin drawing from your state pension, you can use the Government’s State Pension calculator to find out your State Pension age. Additionally, you can Check your State Pension forecast to find out how much money you’ll get.
Will The State Pension Age Change Again?
Government officials say that it is no longer a question of ‘Will the state pension age change again?’, but ‘When will the state pension age change again?’ The State Pension age will continue to gradually increase for men and women and is set to reach age 67 by 2028. Depending on many different factors, including changes in life expectancy, economic and budgetary factors, and more, the State Pension age will be kept under review, meaning that we could be in for even more changes in the future.
Contact RWB Wealth
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