State Pensions – Simpler, Fairer
'500 days to go until the biggest State Pension overhaul in generations' was the announcement made earlier this month. Counting down to 6th April 2016, this statement is the government’s latest initiative to ensure that the general public are informed of the facts concerning this change.
Aimed at rectifying historic states of inequality, those thought to benefit most from these reforms will be women, carers, lower earners and the self-employed.
The new scheme is available for those who reach State Pension age on or after 6 April 2016, providing you were born on or after 6 April 1951 (for men), or on or after 6 April 1953 (for women). If you are currently receiving State Pension, or will reach State Pension age before 6 April 2016, then your State Pension will continue to operate under the old scheme.
Analysis preformed by the Department for Work and Pensions (DWP) shows in the first 10 years of the new flat-rate State Pension around 650,000 women are expected to benefit from the transition valuation, receiving on average £8 a week more than under the old scheme.
In order to qualify for State Pension, you usually need at least 10 qualifying years on your National Insurance record and the amount receivable can fluctuate depending on your record. If you are currently running a business through a limited company and only extracting money by way of dividends, then it is possible that you are not currently making any national insurance contributions in order to qualify for State Pension or other State Benefits. Should you be concerned about your National Insurance record, it is possible to make voluntary payments under Class 3 National Insurance contributions in order to 'top up' your record.
The government are also encouraging individuals, specifically the over 55s, to understand what these changes will mean for them and to secure a detailed State Pension statement so retirement can be effectively planned for. For further information on how to claim your state Pension or obtain a State Pension statement, click here.