Big changes in the State Pension are underfoot. What does this mean for those who have reached and those who are yet to reach retirement age?
The Government is introducing a new State Pension. However, it does not apply to everyone. If you're a man and were born before 6 April 1951, or if you are a woman and were born before 6 April 1953, you will remain on the old pension scheme. This is known as the basic State Pension.
If you were born on or after these dates, a new set of rules apply. You'll be on what's known as the new State Pension. This is for people who'll meet retirement age on or after 6 April 2016.
For those whose birthdays are around these dates, it may feel like a bit of a lucky dip. But the Government had to pick a time to start the new scheme, and the first day of the new financial year was the obvious choice.
The Government has stated that the new State Pension won't be less than £151.25 per week. However, you're not necessarily entitled to this full amount. Your savings and previous National Insurance (NI) contributions will be taken into account when figuring out how much you'll actually get.
On the basic State Pension, the most you can currently get is £115.95. However many receive an additional State Pension on top of this. How much additional State Pension you get depends on your earnings and whether you've claimed certain benefits.
Some people may be better off under the new scheme, but not necessarily. It really comes down to your personal circumstances.
To claim the full new State Pension, you'll need 35 qualifying years on your NI record. A qualifying year is one in which you worked and paid NI contributions; you received NI credits due to sickness, unemployment or as a parent or carer; or you paid voluntary NI contributions.
To claim any of the new State Pension, you'll need to have 10 or more NI qualifying years, though these don't have to be consecutive.
Your new State Pension will be calculated by looking at your NI record before 6 April 2016. Your NI record will determine your 'starting amount'. This will be the higher of these two amounts: the amount you would get under the current, or basic, State Pension rules – or the amount you would have received if the new Sate Pension had been in place when you started to work.
How much you'll receive on the new State Pension depends on your individual circumstances. You'll need to submit personal information to the Government so they can give you an accurate number. Conveniently, it's one of the growing number of online government services that are now available through GOV.UK Verify. You can check your State Pension estimate here.
When you use GOV.UK Verify to check your State Pension, you'll be asked for a lot of information regarding your personal circumstances and finances. To keep this information safe online, and to ensure that no one is trying to pass off as you, you'll need to have your identity checked.
You'll see us on the list of identity verification companies you can use to get checked. When you choose CitizenSafe, you'll get an efficient, straightforward service. And because verifying identities is all we do, you can be 100% confident that we'll keep your details safe and won't share them with anyone, other than the government department you've selected.