The New Rule Changes Regarding State Pensions

If you are a woman approaching retirement you may understandably have assumed that you have not enough National Insurance contributions to be eligible for a full state pension when you retire.You may have also assumed that you would receive your pension at age 60.

However, as people are living longer the Government has decided to make changes regarding pension eligibility. At present, men receive their pension at age 65, whereas the date for women, previously 60, is gradually rising so that by 2020 it will be 65 for women born on or before 5th April 1950. For over 50s, ie those born in the 1960s the Government has made far reaching changes to state pension age. Plans are to increase this to 66 between November 2018 and October 2020, to 67 between 2034 and 2036 and 68 between 2044 and 2046. A recent Government announcement is that the increase to 67 will now occur between 2026 and and 2028.

The new proposals mean that those born between 5 April 1961 and 6 April 1969 will receive their state pension at 67.

Women who are coming up for retirement should check when their date is due at Directgov's State Pension age calculator.

If you are coming up for retirement age you should contact your local pension centre for advice. You can also check your contributions status through Directgov.co.uk.

It will now be easier for older parents and and carers (including registered foster carers) to build up their National Insurance contributions. The new changes are in their favour for receiving credits, and anyone with responsibilty for a child under 12, is an approved foster carer or is caring for a sick or disabled person for more than 20 hours a week, should keep an eye on the changes that are happening. If you are not receiving Child Benefit for an under 12 or carer's allowance if you are a carer, then you will need to check the DirectGov site to claim credits.

If you don't have the full amount of National Insurance payments you may be able to get about 60 per cent of a full state pension through your partner if they have a good National Insurance record. If not, you can buy up to 12 years of voluntary contributions to fill in gaps but this depends on your age. People who have reached state pension age since 6th April 2008 may qualify for back-dated payments but should check on Directgov.

Since October 2011 you may continue to work after the age of 65 as long as you like, if you wish, now that the default retirement age is being gradually phased out. If you do decide to continue to work you will likely take home more money as you will not be paying any National Insurance contributions! You are also likely to pay less income tax after the age of 65.

However, another option is to defer your state pension; this will increase the amount you get at a later date when you do decide to claim. For every five weeks that you defer, you can earn an increase of one per cent to your state pension. What is more, any extra state pension that you have built up will usually increase annually.

Another option is to claim a lump sum payment after a delay of claiming your pension for at least 12 consecutive months. The delay has to have occurred after 5 April 2005. However, you can only do this if you are not receiving certain social security benefits while you put off receiving your state pension.

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