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Your State Pension

Click here to subscribe to Jasmine Birtles' podcast via iTunes explaining what the changes are, what they might mean for you and simple steps you can take to make sure you don’t miss out on money for your future

Click here to listen to Jasmine Birtles' podcast explaining what the changes are, what they might mean for you and simple steps you can take to make sure you don’t miss out on money for your future

Click here to download a printable version of Jasmine's radio clinics explaining the changes to the state pension

Visit www.direct.gov.uk/betterfuture or call 0800 678 1132 to find out more about the changes to the State Pension

The State Pension is changing – read on so you don’t miss out on cash for your retirement.

 We’re all living longer which is good news. To make the most of it, you need to think about how you will fund your retirement. Changes to the State Pension will help get you started – and the good news is more people will now get the full basic State Pension. We’ve worked with finance expert Jasmine Birtles to explain what the changes are, how they might affect you and the simple steps you can take to make sure you don’t miss out on money for your future.

If you’re over 55, approaching retirement, or recently retired, or if you're a carer, you should check out how the changes may affect you and if you need to take action now.

If you are not in one of these groups, you don’t need to do anything yet as the changes won’t affect you immediately, but you might want to start thinking about your financial plans for later life.

What is it?
The basic State Pension is a regular payment you can claim when you reach State Pension age.

How do I build up my State Pension?
The basic State Pension is funded by National Insurance contributions which you build up when you are working. In some situations, for example if you're a carer, looking after young children or claiming certain benefits, the government may have paid some contributions for you or you may have voluntarily bought some contributions. This means that when you reach State Pension age you get a regular amount of money.

How much will I get?
At the moment the full basic State Pension is around £95 a week, but the amount you receive depends on a number of things, most importantly the amount of National Insurance you’ve contributed over the years. For some, it will be possible to do something now to boost their State Pension in the future.

When will I get it?
You will be able to get your State Pension when you reach your State Pension age. Your exact State Pension age depends on when you were born and whether you are a man or woman. The State Pension age for men is currently 65 and for women it is 60 but to make things equal, the State Pension age for women will rise gradually over the next 10 years from 60 to 65 to match men’s. Then from 2024 - 2046 the State Pension age for both men and women will gradually rise from 65 to 68.

Do I have to take my State Pension then?
You don’t have to claim your State Pension or retire when you reach State Pension age. Working for longer may be a good way of building up a better income for when you retire. If you put off claiming your State Pension you pay no National Insurance on your earnings and can get extra money in your State Pension, or a lump sum, when you do come to retire. Working longer may also give you more time to add to your State Pension with private savings of your own.

Knowing your options helps you make better decisions when you reach State Pension age so it’s important to find out the facts and think about the best decision for you.

How do I make sure I get the full basic State Pension?
To get the full amount you need to have paid a certain number of years of National Insurance contributions, usually through work; had them paid for you by the government through credits; been claiming certain benefits or you may have voluntarily bought some contributions. The good news is from April 2010 the number of years of contributions you’ll need to get the full amount is going down to 30 years for everyone. Currently it’s normally 39 years for women and 44 years for men.

If you’ve taken time out of the workforce – perhaps to look after others – there is chance you may not have paid enough contributions. But don’t panic if this sounds like you, as you may be able to do something now to boost your State Pension.

How do I find out how much basic State Pension I have built up?
Visit www.direct.gov.uk/betterfuture to find out more about National Insurance contributions.

What do I do next?
If you haven’t built up enough National Insurance contributions years to claim a full basic State Pension when you retire, there are two key things you need to think about:

1) If you are over State Pension age, you may be able to claim some State Pension through your wife, husband or civil partner if they have a good National Insurance record. You can claim now if you’re a married woman, and from April 2010 other people will also be able to claim, for example, civil partners. You’ll even be able to claim if your partner continues working past State Pension age and puts off claiming their State Pension. You might be able to buy voluntary National Insurance contributions to plug any gaps in your working record, which will mean a bigger State Pension when you retire.

2) If you think either of these options might be for you, visit www.direct.gov.uk/betterfuture. The right decision for you will depend on your personal circumstances.

What should I do if I'm a carer?
From April 2010, if you provide care for someone for 20 hours a week or more you may be able to apply for Carer’s Credit. This will help you build up contributions to your basic State Pension to ensure you get all the pension you deserve when you come to retire. You can’t apply for this credit until April, so there’s no need to do anything until then. If you already get Carer’s Allowance you don’t need to do anything because you already get a credit. For more information visit www.direct.gov.uk/betterfuture.

What if I already claim my State Pension?
If you are one of the 12 million people who already claim their State Pension you will not be affected by most of the changes and you certainly won’t see a reduction in your State Pension. But if you have recently reached State Pension age you could benefit from buying national insurance contributions or from your partner’s pension. For more information please visit www.direct.gov.uk/betterfuture

Where to go for more information
If you’re over 55, approaching retirement, recently retired, or if you're a carer, you’re likely to be affected by the State Pension changes and you may need to take action.

Visit www.direct.gov.uk/betterfuture to find out more about the changes to the State Pension, to use the State Pension Profiler to find out how they may impact on you and for more information about planning for your retirement. Or you can call 0800 678 1132. 

This information is supplied by the Department for Work and  Pensions