State pension payments will start coming through once the claimant hits their state pension age. State pension age is currently set at 65 but it is gradually being increased over the coming months.
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It will be 66, for everyone, by October 2020 and there are plans to increase it to 68 in the coming years.
The increases are being implemented in in stages and the next rise will be on May 6.
There is no need to claim state pension age at all if the person involved does not wish to.
If a state pension is deferred they payments could be increased by the time it is actually claimed.
It is up to the individual’s discretion as to when state pension will be claimed, providing a certain amount of freedom.
However, it should be noted that if a state pension is delayed there are certain limits in place which can affect if it can be backdated.
The government detail that a person can’t backdate their state pension claim more than 12 months before the date in which they receive it.
They go on to explain that if the claimant asks the government to backdate a claim, they will work out how much state pension the claimant is due back to the date the person tells them they want the claim to start from.
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It will be this calculated amount that will be paid out.
The payment does not include any interest and the claimant will not earn extra state pension for the period they backdate the claim for.
State pension payments in general are dependent on a person’s national insurance record.
To receive any amount, a person will need at least 10 years of contributions.
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To receive the full amount, 35 years of contributions will be needed. The “full” amount is £175.20 per week but this can be increased further.
Delaying state pension can increase it’s payments when it’s eventually claimed. The longer the deferment lasts, the larger the increases will be.
State pension will increase for every week it is deferred, so long as it is deferred for at least nine weeks. It will increase by the equivalent of one percent for every nine weeks of deferment.
This works out at nearly a six percent increase for every 52 weeks. The extra amount will be paid along with the regular state pension, it will not come through in a separate payment.
Extra state pension payments can be taxed if the extra income puts a person over their “personal allowance”.
A person’s total income is taken into account when working out tax bills and it can include:
- State pension
- Additional state pension
- Private pensions (workplace or personal)
- Earnings from employment or self-employment
- Taxable benefits
- Income from investments, property or savings
Some people may be unsure of where they stand with their state pension but the government provides certain tools for helping with this.
The government website includes calculators and interactive tools which can help people identify their state pension age, track down private pensions and receive a payment forecast.
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