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04th December 2019
Data for people qualifying for the full new State Pension following its introduction in April 2016 reveals that almost two in five pensioners (365,290 people, or 38% of claimants) receive less than £150 a week, while a further 314,290 people (33% of claimants) receive more than £150 a week.
The new State Pension is a regular payment from the Government that most people can claim in later life. You can claim the new State Pension at State Pension age if you have at least ten years’ National Insurance contributions and are a man born on or after 6 April 1951, or a woman born on or after 6 April 1953. The earliest you can receive the basic State Pension is when you reach State Pension age.
The full amount you can get under the new State Pension is £168.60 per week (in 2019/20), but this depends on your National Insurance (NI) record. If you have 35 years or more of NI contributions, you will get the full amount; between 10 and 34 years of contributions, you will receive a proportion of the pension; and less than ten years of NI contributions, you aren’t eligible for the new State Pension.
The data also shows 282,447 pensioners (29% of claimants) are receiving a new State Pension from April 2016 with a ‘protected payment’, which essentially means they receive more than the new full State Pension, as benefits built up over the old and new systems are worth more than the new flat rate.
People can receive less than the full flat- rate State Pension when their NI record is incomplete or have paid less than the 35 qualifying years required under the new rules (usually through periods of contracting out).
The State Pension is the foundation of most people’s retirement plans, and yet this data shows more than half of those eligible to claim the State Pension under the new flat-rate system receive less than the full amount. Given the various changes that have been introduced over the years, it’s not surprising people find the whole system difficult to understand.
The State Pension can be a minefield. And remember, it is only really there to provide a basic standard of living when you retire. Of all the life events to plan for, you should spend the longest time on preparing for retirement.
If you’re in your 50s or early 60s, you may increasingly be thinking more about retirement and how to plan for it. One of the most common dilemmas for people of this age is how best to fund their lifestyle once they’ve stopped work and maintain their pre-retirement standard of living.
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