Less Than Half to Get Full New State Pension

Less Than Half to Get Full New State Pension.

A freedom of information request by Hargreaves Lansdown has found that only 45% of the retiring population (retiring 2016 through to 2020) will be entitled to a full, new style, flat rate state pension at state retirement age.

With effect from April 2016, the flat rate state pension starts.

• £150 per week the flat rate state pension has been set to start at.

• 35 years full National Insurance record rather than the current 30 years from April 2017

• Credit for non-workers – being registered for unemployment benefits or disability benefits or home responsibilities protection – if you gave up work to look after children (in receipt of child benefit) or carers allowance will also count towards your National Insurance years credited.

The changes do not affect those that have already reached State Pension Age before April 2016

Not Detrimental

As with many of these stories, some commentators will go for the shock headlines.
However, we would stress that when you do receive a State Pension Forecast, you receive it on both the old and the new basis.  This means that if the new rules are detrimental to you e.g.  You have many years of credit towards the second tier state pension Graduated, SERPS or State Second Pension because you were not ‘contracted out’ but were ‘contracted in’, then you will still receive the higher State pension benefit that you are entitled either on the old or new basis.

Are the State Pension Changes As A Good Thing?

We have to admit, we think they are.  The previous government reduced the minimum years contributions/credit required from 90% of a working lifetime of say 49 years for men (16-65) – meaning 44 years credits down to just 30 years required to secure a full state pension.  Given an ageing population and less workers paying for more people in retirement, this was absolute folly.

The move by Government to bring the minimum years credits back up to 35 and extending state retirement ages at a faster rate than before to 66/67/68/70 makes sense.

Take a look at our State Pension Age Table/Calculator

Visit the Department For Work Pensions for their State Pension Forecaster https://www.gov.uk/calculate-state-pension