Quick guide to pension changes

Our colleagues on the Oddfellows Citizens Advice Line share their insight on pension changes and what it could mean to you.

Changes to the State Pension
The new State Pension is the one you may receive if you reach State Pension age on or after 6 April 2016 – for a man if you were born on or after 6 April 1951, or for a woman if you were born on or after 6 April 1953. The full new State Pension is £155.65 per week. Your National Insurance record is used to calculate your new State Pension and you’ll usually need 10 qualifying years to get any new State Pension. The amount you get can be higher or lower depending on your National Insurance (NI) record – it will be higher if you have over a certain amount of Additional State Pension or SERPS.

Upcoming increases to State Pension age
From December 2018, the state pension age will start to increase for both men and women to reach 66 by October 2020. The present Government is planning further increases, which will raise the state pension age from 66 to 67 between 2026 and 2028.

You don’t have to stop working when you reach State Pension age but you’ll no longer have to pay National Insurance.

Get your State Pension forecast
You can contact the Future Pension Centre to get a forecast and confirm your state pension age by phone or post. If you aren’t on course for the full amount of £155.65 you can also request information about making up any gaps in your NI record. There will be a time limit within which this is to be done and the Future Pension Centre will tell you what you need to pay. For every qualifying year added to your National Insurance record after 5 April 2016, £4.44 per week will be added to your pension. You can do this until you reach the full new State Pension amount or reach State Pension age – whichever is first.

Telephone: 0345 3000 168 (statements and enquiries)
Textphone: 0345 3000 169
Or visit www.gov.uk/future-pension-centre

Working after State Pension age
You don’t have to stop working when you reach State Pension age but you’ll no longer have to pay National Insurance.

Deferring the new State Pension
You don’t have to claim the new State Pension as soon as you reach State Pension age. Deferring the new State Pension means that you will get extra money when you do claim it. Deferring your State Pension could affect any other benefits and tax credits that you receive, so if you get benefits and you want to defer your State Pension, you must tell the Pension Service.

You’ll need to defer for at least 9 weeks  your State Pension will increase by 1% for every nine weeks you put off claiming. This works out at just under 5.8% for every full year you put off claiming.

Pension Credit
Pension Credit tops up your weekly income if it’s below £155.60 (for single people) or £237.55 (for couples). You won’t get the benefit of deferring your State Pension if you or your partner are on Pension Credit, eg you won’t build up extra State Pension or a lump sum for deferring your State Pension. When working out if you can get Pension Credit, the income you’d get from your State Pension is included whether you’re claiming it or not.

Private Pensions – Pension Wise
Of course many people have private pensions as well as entitlement to the State Pension, and for many of these schemes the rules changed in April 2015. Pension Wise is a new government service run by Citizens Advice, set up to help people understand the new pension options available to them if they have a defined contribution pension. It offers free and impartial face to face guidance.

To find out more and to book an appointment:
Telephone: 0800 138 8292
Or visit www.pensionwise.gov.uk

Useful links
Pensions Advisory Service: Call 0300 123 1047 or visit www.pensionsadvisoryservice.org.uk.

Age UK: Call 0800 169 2081 or visit www.ageuk.org.uk/money-matters/

Oddfellows members can also call the Oddfellows Citizens Advice Line or the Care and Welfare Helpline.

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