[10.07.16]

A new state pension system was introduced on 6 April 2016. The reforms aim to simplify the pension system and create a simpler, fairer state pension.

The new state pension has been introduced for people who reach state pension age on or after 6th April 2016. It applies to:

• a woman born on or after 6 April 1953
• a man born on or after 6 April 1951

If you were born before those dates you’ll be able to claim your state pension under the old system. The amount you will receive will depend on your own National Insurance Contributions.

When you reach state pension age the minimum amount of state pension will be calculated. The highest amount you can receive under the new state pension will be £155.65 per week. The full amount will only be given to people with at least 35 years National Insurance Contributions and to qualify for any state pension, you will need at least 10 years of contributions.

If you’ve been in a workplace, personal or stakeholder pension you may have paid lower National Insurance Contributions and paid into one of these pensions instead. This is known as being ‘contracted out’ of the Additional State Pension. Many people may be unaware they have been ‘contracted-out’, and that they will receive less from their State Pension.

You can get a State Pension forecast based on an estimate of what your National Insurance record will be when you reach State Pension age online, or a statement based on your National Insurance record so far by phone or post.

If you aren’t on course to get a full state pension, there may be some things you can do to help boost your pension:

Fill gaps in your NI record with voluntary contributions – How much these are and if you are eligible will depend on your individual circumstances.

Deferring the State Pension to increase your pot – you don’t have to claim your State Pension when you reach State Pension age.

If you used to or currently live abroad – you may be able to get a pension from the country you live/ lived in. Contact the department responsible for State Pensions in that country; but be aware that this may change as part of BREXIT.

Apply for Carer’s Credit – If you’re a carer and don’t work, this could affect your NI record and impact your State Pension amount; but you can apply for a Carer’s Credit which will go towards your NI record and protect your entitlement to State Pension.

Castletons Accountants