State Pension is an entitlement for people of state pension age. The amount you get depends on how much national insurance you have paid or been credited with over your working life.
State pension age used to be 60 for a woman and 65 for a man. However, women’s pension age is gradually increasing and will reach 65 by November 2018. Over subsequent years there will be further increases to pension age for both men and women. You can work out the exact date you will reach state pension age by using the state pension calculator at gov.uk.
You do not have to have stopped working in order to get State Pension. You do not have to claim it as soon as you reach state pension age. If you prefer, you can wait and receive it later, either as a lump sum with your normal weekly pension or as an increased weekly rate of pension.
A new flat-rate single –tier State Pension has been introduced for people reaching pension age on or after 6th April 2016. People who reached pension age before that date won’t be affected, even if they have deferred their pension.
Pensioners qualifying under the previous scheme needed 30 years worth of national insurance contributions or credits to get the full basic State Pension (£122.30 per week in 2017/18). They could also receive Additional State Pension, which is an extra amount based on earnings (unless they had belonged to another pension scheme and chosen to ‘contract out’ of Additional State Pension).
The new State Pension scheme is simpler. In order to receive the full new State Pension (£159.55 per week in 2017/18) you will be required to have 35 qualifying years’ of National insurance contributions or credits and no deductions for contracted out years.
Under the new system additional pensions and ‘contracting out’ are abolished. However, there are transitional provisions for people who have built up qualifying years or credits prior to 6 April 2016, to ensure that you will not receive a lower pension amount than you would have received under the previous system rules, so long as you meet the new 10 year minimum qualifying period. This means that no-one will lose any additional state pension they have accrued.
Go to www.gov.uk for more information about the new State Pension.
The Pension Service should contact you before you reach state pension age and explain how you can claim State Pension. If they do not get in touch, you should contact the State Pension claimline on: 0800 731 7898.
National Insurance Credits
Parents and carers who are receiving Child Benefit for a child under 12 automatically get national insurance credits towards their state pension. Some people who are caring for a disabled person automatically get national insurance credits, but others have to apply for them. Foster carers have to apply for the credits. Click here for more information about national insurance credits.
From 2011/12 the government has also introduced a national insurance credit for grandparents and other relatives who spend time caring for children whilst their parents are at work. Click here or contact our advice service for more information on these Specified Adult Childcare credits.
Pension Credit is made up of two parts, a guarantee credit and a savings credit. You may be entitled to either part, or both. However, people reaching state pension age on or after 6th April 2016 are not able to claim savings credit.
You can claim Pension Credit whether or not you are still working. You do not need to have paid any national insurance contributions.
This is designed to ensure a minimum income for older people. To be eligible, you or your partner must be aged above the Pension Credit qualifying age. This is gradually increasing in line with the women’s state pension. Use the pension calculator to work out when you will reach Pension Credit age.
You will only be entitled to guarantee credit if your income is below a certain level. The level depends on whether you are single or have a partner, and on whether there are additional factors such as a severe disability or caring responsibilities.
Only certain types of income count for Pension Credit and not all your income will be taken into account. Some income will be assumed from any savings above £10,000.
If you are on guarantee credit, you will get maximum Housing Benefit and Council Tax Support. If you have a mortgage or home loan, you may be able to get an extra amount to help with your mortgage interest.
The savings credit can only be paid to people who reached state pension age before 6th April 2016 and who have a small amount of their own income or savings. To be eligible, you or your partner have to be at least 65 years of age. The award will be based on how much your income is over a certain threshold. However, if you have above a certain level of income, you will not be entitled to receive payments.
You can contact our advice service or go to www.gov.uk to find out whether you qualify for Pension Credit and how much you should get. You should apply for Pension Credit by phoning the national telephone claim line on 0800 99 1234.