The State Pension is offered to Britons of an eligible age who have made significant National Insurance (NI) contributions throughout their working lives. Pensioners are provided with a sum of money from the government each week, which assists with the cost of living after completion of work. Recently, pensioners could celebrate as they noted an increase in their entitlement.
- State Pension 2020: How to check forecast entitlement
This is due to the Triple Lock Mechanism – implemented in 2010 by the government.
Under this scheme, the State Pension rises each year by whichever is the highest: the rate of inflation, 2.5 percent, or average earnings.
In 2020/21, the amount was raised by 3.9 percent to line up with average earnings.
Pensioners can currently expect to receive a maximum of £134.25 per week on the basic State Pension scheme – available to those who reached State Pension age before April 6, 2016.
For those who are entitled to the full new State Pension, a maximum of £175.20 can be received.
However, in a week’s time, there are important changes to the State Pension to look out for – and many could be affected.
The government has moved up its plans to alter the State Pension age – the age at which Britons are entitled to the payment – and the latest changes will take place in May.
While the traditional age for the State Pension stood at 60 for women, and 65 for men, the government has been implementing gradual changes.
The Department for Work and Pensions (DWP) has confirmed the State Pension age will now be raised to 66, ahead of eventual rises to 68.
On May 6, 2020, anyone born between July 6, 1954 and August 5, 1954 will reach State Pension age.
These are the people who are most imminently affected by the government’s announcements.
The changes, the government website states, are in line with an increased life expectancy in the UK.
Pension rules could be relaxed for public sector workers amid COVID-19 [ANALYSIS]
National Insurance threshold has risen – how it affects state pension [INSIGHT]
Pension credit can be increased under these circumstances [ANALYSIS]
- Money saving: Warning as over 50s found to have hundreds hidden away
This sees far more Britons than ever before spend an increased portion of their adult lives in retirement.
Projections from the Office for National Statistics (ONS) revealed the number of people over State Pension age in the UK is predicted to grow by a third between 2017 and 2042, from 12.4 million in 2017 to 16.9 million in 2042.
From 2017 calculations, the government states a 65-year-old can now expect to spend 22.8 years on average in receipt of State Pension.
This is compared to 13.5 years when the State Pension was first introduced in 1948.
Under government proposals, the State Pension age would increase to 68 between 2037 and 2039.
Britons should note State Pension is not automatically paid, however it is easy to keep track of when one is entitled, despite frequent changes.
The government sends a reminder to those approaching the eligible age no less than two months before they qualify for the sum, reminding them a claim is imminent.
Additionally, the government website can be used to track eligibility.
By entering one’s date of birth and gender, the government tool provides the potential claimant with their eligibility date and age.
The government has also encouraged Britons to place money into a workplace pension – which is paid into by the person’s company alongside an individual’s payments.
The Your Pension website states over 20 million State Pension forecasts have already been viewed online.
Source: Read Full Article