{"id":1061,"date":"2014-10-31T16:21:10","date_gmt":"2014-10-31T16:21:10","guid":{"rendered":"http:\/\/www.newsfin.co.uk\/news\/?p=1061"},"modified":"2014-10-31T16:21:10","modified_gmt":"2014-10-31T16:21:10","slug":"state-pension-reform","status":"publish","type":"post","link":"https:\/\/www.vizionwealth.co.uk\/news\/state-pension-reform\/","title":{"rendered":"State Pension reform"},"content":{"rendered":"

Over half of the UK population unaware of government plans<\/strong><\/h3>\n

Over half of the UK population are unaware of government plans to reform the State Pension and the impact that will have on them, according to recent research[1]. Among the 55 to 64-year-old age group, 32% are unaware of the changes due to come into effect in April 2016.<\/p>\n

Underestimating State Pension values<\/strong>
\nAlthough most of the respondents underestimated the value of their State Pension and admitted to not knowing the details of the reforms, two thirds of men and women regard it as important to their retirement income planning.<\/p>\n

Of those surveyed, just under half of 55 to 64-year-olds were unsure as to whether or not they would be better off under the new State Pension system compared to the current one.<\/p>\n

Key part of government reforms<\/strong>
\nThe flat rate State Pension is a key part of government reforms to the UK’s retirement planning and will benefit savers by demonstrating the value of pension saving. But just under half of those aged between 55 and 64 who are about to retire have no understanding of whether or not they will be better off.<\/p>\n

Women are more likely not to know the detail of the flat rate pension reforms \u2013 which require people to have worked and paid National Insurance contributions for
\n35 years \u2013 than men. Around 57% of women admitted to not knowing the details, compared with 43% of men.<\/p>\n

New State Pension<\/strong>
\nThe new State Pension will be a regular payment from the Government that you can claim if you reach\u00a0State Pension age\u00a0on or after 6 April 2016.
\nYou’ll be able to get the new State Pension if\u00a0you’re eligible\u00a0and:<\/p>\n

– a man born on or after 6 April 1951
\n– a woman born on or after 6 April 1953<\/p>\n

The new State Pension will replace the current State Pension scheme. You’ll receive your State Pension under the\u00a0current scheme if you reach State Pension age before 6 April 2016. You can still receive a State Pension if you have other income like a personal pension\u00a0or a\u00a0workplace pension.<\/p>\n

How much you can get<\/strong>
\nThe full new State Pension will be no less than \u00a3148.40 per week. The actual amount will be set in autumn 2015. Your\u00a0National Insurance record\u00a0is used to calculate your new State Pension, and you’ll usually need 10 qualifying years to get any new State Pension.<\/p>\n

The amount you receive can be higher or lower depending on your National Insurance record. It will only be higher if you have over a certain amount of Additional State Pension. In addition, you may have to\u00a0pay tax on your State Pension.<\/p>\n

Working after State Pension age<\/strong>
\nYou don’t have to stop working when you reach State Pension age but you’ll no longer have to pay\u00a0National
\nInsurance. You can also request flexible working arrangements.<\/p>\n

Eligibility<\/strong>
\nYou’ll be able to claim the new State Pension if you’re:<\/p>\n

– a man born on or after 6 April 1951
\n– a woman born on or after 6 April 1953<\/p>\n

The earliest you can receive the new State Pension is when you reach State Pension age. You’ll usually need at least 10 qualifying years on your\u00a0National Insurance record\u00a0to receive any State Pension. They don’t have to be 10 qualifying years in a row.<\/p>\n

This means for 10 years, at least one or more of the following applied to you:<\/strong><\/p>\n

– you were working and paid\u00a0National Insurance contributions
\n– you were\u00a0getting National Insurance credits, e.g. for unemployment, sickness or as a parent or carer
\n– you were paying\u00a0voluntary National Insurance contributions<\/p>\n

If you’ve\u00a0lived or worked abroad,\u00a0you may still be able to receive some new State Pension and could also qualify if you’ve paid\u00a0married women’s or widow’s reduced rate contributions.<\/p>\n

Defer your new State Pension<\/strong>
\nYou 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 may receive an extra State Pension when you do claim it. The extra amount is paid with your State Pension (e.g. every four weeks) and\u00a0may be taxable.<\/p>\n

How much you’ll get<\/strong>
\nThe rates and minimum time you’ll need to defer for will be confirmed in 2015. It’s expected that you’ll need to defer for at least nine weeks \u2013 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. After you claim, the extra amount you get because you deferred will usually increase each year in line with inflation.<\/p>\n

How it’s calculated<\/strong>
\nYour new State Pension is based on your\u00a0National Insurance record. National Insurance contributions or credits on your National Insurance record before 6 April 2016 will count towards your new
\nState Pension.<\/p>\n

Valuing your National Insurance contributions and credits made before 6 April 2016<\/strong>
\nYour National Insurance record before 6 April 2016 is used to calculate your ‘starting amount’. This is part of your new State Pension.<\/p>\n

Your starting amount will be the higher of either:<\/strong><\/p>\n

– the amount you would get under the current State Pension rules (which includes\u00a0basic State Pension\u00a0and\u00a0Additional State Pension)
\n– the amount you would get if the new State Pension had been in place at the start of your working life<\/p>\n

Your starting amount will include a deduction\u00a0if you were contracted out\u00a0of the Additional State Pension. You may have been contracted out because you were in a certain type of workplace, personal or stakeholder pension.<\/p>\n

If your starting amount is less than the full new State Pension<\/strong>
\nYou may be able to get more State Pension by adding more qualifying years on your National Insurance
\nrecord after 5 April 2016 (until you reach the full new State Pension amount or reach State Pension age \u2013 whichever is first).<\/p>\n

Each qualifying year on your National Insurance record after 5 April 2016 will add about \u00a34.24 a week (which is \u00a3148.40 divided by 35) to your new State Pension.<\/p>\n

If your starting amount is more than the full new State Pension.
\n<\/strong>The difference between your starting amount and the full new State Pension is called your ‘protected payment’. Your protected payment is paid on top of your new State Pension and increases each year in line with inflation. Any qualifying years you have after 5 April 2016 won’t add more to your State Pension.<\/p>\n

You didn’t make National Insurance contributions or get National Insurance credits before 6 April 2016<\/strong>
\nYour State Pension will be calculated entirely under the new State Pension rules. You’ll usually need at least
\n10 qualifying years on your\u00a0National Insurance record\u00a0to get any State Pension. You’ll need 35 qualifying years to receive the full new State Pension, and you’ll get a proportion of the new State Pension if you have between 10 and 35 qualifying years.<\/p>\n

Get a State Pension statement<\/strong>
\nYou can get a\u00a0State Pension Statement\u00a0that can tell you how much new State Pension you may get.<\/p>\n

You’ve been in a workplace, personal or stakeholder pension<\/strong>
\nYour\u00a0starting amount\u00a0may include a deduction if you were in certain:<\/p>\n

– earnings-related pension schemes at work (e.g. a final salary or career average pension) before 6 April 2016
\n– workplace, personal or stakeholder pensions before 6 April 2012<\/p>\n

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\u00a0Additional State Pension\u00a0and will affect most people who have been in work.<\/p>\n

You can check with your pension provider if you’ve been contracted out in the past.\u00a0The Pension Tracing Service
\nmight be able to find your pension providers’ contact details if you’ve lost contact with them.<\/p>\n

Changes to contracting out from 6 April 2016<\/strong>
\nOn 6 April 2016, these rules will change so that if you’re currently contracted out:<\/p>\n

– you will no longer be contracted out
\n– you will pay more\u00a0National Insurance\u00a0(which will be the standard amount of National Insurance)<\/p>\n

Check if you’re currently contracted out<\/strong>
\nYou may be able to see if you’re contracted out by looking at your payslip. You’re contracted out if the National Insurance contributions line has the letter D or N next to it. You’re not contracted out if it has a letter A. You can check with your employer or pension provider if there is a different letter.<\/p>\n

You’re more likely to be contracted out if you work in public sector organisations and professions such as:<\/strong><\/p>\n

– NHS
\n– local councils
\n– fire services
\n– civil service
\n– teachers
\n– police forces
\n– armed forces<\/p>\n

Lower rate National Insurance<\/strong>
\nYou pay National Insurance at a lower rate if you’re contracted out. Check with your employer to find out if you’re contracted out.<\/p>\n

Your\u00a0new State Pension\u00a0is based on your National Insurance record when you reach State Pension age. You’ll usually need to have 10 qualifying years on your National Insurance record to receive any new State Pension. You may get less than the new full State Pension if you were\u00a0contracted out\u00a0before 6 April 2016.<\/p>\n

You may receive more than the new full State Pension if you have over a certain amount of\u00a0Additional State Pension.<\/p>\n

You’ll need 35 qualifying years to get the new full State Pension if you don’t have a National Insurance record before 6 April 2016.<\/p>\n

Qualifying years if you’re working<\/strong>
\nWhen you’re working, you pay National Insurance and get a qualifying year if:<\/p>\n

– you’re employed and earning over \u00a3153 a week from one employer
\n– you’re\u00a0self-employed\u00a0and paying National Insurance contributions<\/p>\n

You might not pay National Insurance contributions because you’re earning less than \u00a3153 a week. You may still get a qualifying year if you earn between\u00a0\u00a3111 and \u00a3153 a week from one employer.<\/p>\n

Qualifying years if you’re not working<\/strong>
\nYou may receive\u00a0National Insurance credits\u00a0if you can’t work \u2013 e.g. because of illness or disability, you’re a carer or if you’re unemployed.<\/p>\n

For example, if you:<\/strong><\/p>\n

– claim\u00a0Child Benefit\u00a0for a child under 12 (or under 16 before 2010)
\n– get Jobseeker’s Allowance or Employment and Support Allowance
\n– get Carer’s Allowance<\/p>\n

Gaps in your National Insurance record<\/strong>
\nYou can have\u00a0gaps in your National Insurance record\u00a0and still receive the full new State Pension. You can obtain a\u00a0State Pension statement\u00a0which will tell you how much State Pension you may get. You can then apply for a\u00a0National Insurance statement\u00a0from HM Revenue and Customs (HMRC) to check if your record has gaps. You may be able to make\u00a0Voluntary National Insurance contributions\u00a0if you have gaps in your National Insurance Record that would prevent you from getting the full new State Pension.<\/p>\n

Inheriting or increasing State Pension from a spouse or registered civil partner<\/strong>
\nYou may be able to inherit an extra payment on top of your new State Pension if you’re widowed. But you won’t be able to inherit anything if you remarry or form a new registered civil partnership before you reach State Pension age.<\/p>\n

Inheriting Additional State Pension<\/strong>
\nYou’ll inherit part of your deceased partner’s\u00a0Additional State Pension\u00a0if your marriage or registered civil partnership with them began before 6 April 2016 and one of the following applies:<\/p>\n

– your partner reached State Pension age before 6 April 2016
\n– they died before 6 April 2016 but would have reached State Pension age on or after that date<\/p>\n

It will be paid with your State Pension.
\nInheriting a protected payment
\nYou’ll inherit half of your partner’s
\nprotected payment\u00a0if your marriage or registered civil partnership with them began before 6 April 2016 and:<\/p>\n

– their State Pension age is on or after 6 April 2016
\n– they died on or after 6 April 2016<\/p>\n

It will be paid with your State Pension.<\/p>\n

Inheriting extra State Pension or a lump sum<\/strong>
\nYou may inherit part of or all of your partner’s extra State Pension or lump sum if:<\/p>\n

– they died while they were deferring their State Pension (before claiming) or they had started claiming it\u00a0after deferring
\n– they reached State Pension age before 6 April 2016
\n– you were married or in the registered civil partnership when they died<\/p>\n

Your partner’s National Insurance record and your State Pension<\/strong>
\nThe new State Pension is based on your own National Insurance record. However, you might be able to increase your new State Pension if you’re a woman and paid married women’s and widow’s\u00a0Reduced Rate contributions, so you need to find out\u00a0if you’re eligible.<\/p>\n

If you get divorced or dissolve your registered civil partnership The courts can make a ‘pension sharing order’ if you get divorced or dissolve your registered civil partnership. You’ll receive an extra payment on top of your State Pension if your ex-partner is ordered to share their additional State Pension or protected payment with you. Your State Pension will be reduced if you’re ordered to share your additional State Pension or protected payment with your partner.<\/p>\n

Living and working overseas<\/strong>
\nYou may contribute to the pension scheme of the country that you live or work in. Contact the pension service of the country you live or work in to find out if you are eligible. You may also get a State Pension from both the country you worked or lived in and the UK if you meet the eligibility for both countries. You’ll have to claim your pension in each country.<\/p>\n

Your UK State Pension will be based on your\u00a0UK National Insurance record. However, you may be able to use your time abroad to make up the 10 qualifying years needed to get any new State Pension.<\/p>\n

This is most likely if you’ve lived or worked in:<\/strong><\/p>\n

– the European Economic Area (EEA)
\n– Switzerland
\n– certain countries that have a\u00a0social security agreement with the UK<\/p>\n

You will meet the minimum qualifying years to get the new State Pension because of the time you worked overseas. Your new State Pension amount will
\nonly be based on the seven years of
\nNational Insurance contributions you made in the UK.<\/p>\n

Retiring overseas<\/strong>
\nYou can\u00a0claim the new State Pension overseas\u00a0in most countries.<\/p>\n

Your State Pension will increase each year but only if you live in:<\/strong><\/p>\n

– the European Economic Area (EEA)
\n– Switzerland
\n– certain countries that have a\u00a0social security agreement with the UK<\/p>\n

Your new State Pension may be affected if your circumstances change. You can obtain more information from the\u00a0International Pension Centre.<\/p>\n

Source:<\/em>
\n [1] Research for MetLife conducted online between 21\u201322 May among a nationally representative sample of 2,038 adults by independent market research firm ICM.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Over half of the UK population unaware of government plans Over half of the UK population are unaware of government plans to reform the State Pension and the impact that will have on them, according to recent research[1]. Among the 55 to 64-year-old age group, 32% are unaware of the changes due to come into… Read more »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,5],"tags":[],"_links":{"self":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts\/1061"}],"collection":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/comments?post=1061"}],"version-history":[{"count":0,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts\/1061\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/media?parent=1061"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/categories?post=1061"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/tags?post=1061"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}