Pensions ‘shouldn’t be a government piggy bank’ says Altmann
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The Department for Work and Pensions (DWP) has confirmed many Brits will face changes to their State Pension from next year. Millions of Britons rely on their State Pensions to cover basic living costs once they retire, with more than 12.6 million Britons a month claiming their payment.
Under the current rules, both men and women can claim their State Pension at the age of 66.
The new State Pension is currently £179.60 a week which equates to just over £9,350 a year if you are on the full rate.
Payments are currently affected by how much National Insurance you have paid over your career, before the new State Pension was introduced in 2016.
Contributions and credits made since then are also considered.
Why is the State Pension changing?
The DWP has confirmed its plans to change the rules on how your State Pension is calculated – if you move abroad.
Changes will have to be made because the UK has now left the EU.
The Government says changes in how your payments are calculated will affect Brits who move to the EU, EEA or Switzerland.
Changes will also apply to those who have previously lived in Australia, before March 1, 2001, Canada or New Zealand.
The DWP which oversees State Pensions, said on Gov.uk: “The change will affect you whether or not you have claimed your UK State Pension yet.
“Your UK State Pension will be calculated, or recalculated if already in payment, using only your UK National Insurance record.”
What are the new changes?
State Pensions are based on your UK National Insurance record.
You need 10 years of UK National Insurance contributions to be eligible for the new State Pension.
In the past, you might have been able to use time spent abroad to make up the 10 qualifying years.
But from January 1, 2022, you won’t be able to count periods living in certain countries towards this.
Periods living in Australia (before March 1, 2001), Canada or New Zealand, won’t count towards calculating your State Pension if both the following apply:
You are a UK national, EU or EEA citizen or Swiss national
You move to live in the EU, EEA or Switzerland on or after January 1, 2022, including if you move to live in another EU, EEA country or Switzerland on or after January 1, 2022.
These changes won’t affect you if you continue to live in the UK, or if are a UK national, EU or EEA citizen or Swiss national living in the EU, EEA or Switzerland by December 31, 2021
These plans will need to be approved by Parliament before they are officially introduced.
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