A REGULAR PAYMENT FROM THE GOVERNMENT THAT YOU RECEIVE WHEN YOU REACH STATE PENSION AGE

The basic State Pension is a regular payment from the Government that you receive when you reach State Pension age. To receive it you must have paid or been credited with National Insurance contributions.

In his 2013 Autumn Statement, the Chancellor announced that someone in their 40s won’t receive their State Pension until they are aged 68; the linkage to life expectancy is likely to mean someone starting work now may have to wait to age 72, and a child born today is unlikely to receive their State Pension until they reach 75.

An increase in the retirement age to 69 is expected to fall in the mid 2040s, potentially affecting those in their late 30s, while people in their late 20s are likely to have to work until their 70th birthdays in the 2050s.

Because life expectancy rates are constantly rising, the final retirement dates for people affected by the new policy will not be fixed for several years. An independent review will assess likely lifespans every five years, with the first due after the 2015 election.

The basic State Pension is currently worth £110.15 a week for a single person in 2013/14 (or £5,728 a year).

If you’re married, and both you and your partner have built up State Pension, you’ll get double this amount – so £220.30 a week. But if your partner has not built up their own State Pension, they’ll still be able to claim a State Pension based on your record. The maximum is £66 a week.

If your income is below a certain level, you can boost it by claiming pension credit. This will take your income up to £145.40 a week for a single person and £222.05 a week for a couple (in 2013/14).

Additional State Pension

You may also qualify for the Additional State Pension, also known as State Earnings Related Pension Scheme (SERPS) or State Second Pension (S2P).

The additional pension is based on your earnings. Many people may have opted, or ‘contracted’, out of the Additional State Pension at some point in their working lives. The average additional pension, therefore, is around £124 a week in 2013/14.

There are a number of rules that can influence your retirement planning. To discover how we could help you save for your retirement and achieve financial independence, please contact us for further information.

There are a number of rules that can influence your retirement planning. To discover how we could help you save for your retirement and achieve financial independence, please contact us for further information.