Ah, the State Pension. Never has any payment from the Government been shrouded in as much myth and misunderstanding. To be fair, this is due to the complexity of the whole thing and I completely sympathise with everyone who has ever uttered the words “I won’t be getting anything when I retire”, “It’s unfair that my pension has been taken from me” or “I was planning on retiring at 60 and now I can’t”. I mean, who was to know that things would change? And who knew the rules anyway?
Whatever your politics, let’s put this out there and accept that the current and previous Governments have not won any prizes for making the State Pension clear and easy to understand. Let’s face it, they have had wars and the NHS to deal with, as well as divorcing us from Europe, sorting their own complex expenses out and working out whose turn it is next to go on “Strictly”. Your little pension has hardly been the most exciting thing on the agenda – but it should have been, as one of the main results of creating the NHS is that we’re all expected to live longer and so the cost of being retired just keeps going up and up.
Anyhow, let’s leave politics out of it for a moment and focus on the facts which matter to you.
Here’s a first lesson in what you need to know about the State Pension…
- Simply put, the State Pension is a payment made by the Government to people over a certain age, who qualify. I’m not going to go into huge detail here – you can visit https://www.gov.uk/check-state-pension for that, including a personal projection of your own pension which is pretty cool and worth a look – but broadly speaking, you hit a certain age and you get a payment from the state.
- There are two types of State Pension in the UK. The Basic State Pension, which applies to men born before 6 April 1951 and women born before 6 April 1953, and the New State Pension, for everyone else. Which will you get?
- The current amount of Basic State Pension (i.e. paid to people who have already retired) varies depending on how much National Insurance that person has paid. The maximum amount anyone can get, however, is £122.30 per week.
- The New State Pension is a bit higher at £159.55 per week, which works out at £8,296.60. Not enough to live on by most people’s standards.
- The State Pension is different to a workplace pension or personal pension. If you have one (or more) of these other pensions then this will be on top of what you get from the government. More about this later.
- Now for the controversial one, the age at which your State Pension starts to be paid depends on when you were born. For some people this age has been increased and unfortunately, some people didn’t think that they were told about the change quickly enough. The good news is that these people (including a group called WASPI who are pretty active on the twitter) have been very vocal about how unhappy they are and there is now a tool on the internet which tells you exactly when you will get your State Pension. Try it! It’s here https://www.gov.uk/state-pension-age
Any questions let me know. There is much more to follow….