State pension triple lock ‘will be broken’ says Liam Halligan
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State Pension payments undergo increase every year under the triple lock mechanism, based on the highest of three components: wages, inflation or 2.5 percent. However, with wages data warped this year due to more people getting back into employment after the pandemic, the Office for Budget Responsibility (OBR) has projected a potential eight percent rise to the state pension sum. Some have speculated whether this kind of increase will actually occur, however, others have welcomed the idea of a more significant rise.
Whatever the change, many people will be planning their retirement, and as a result what they are set to receive from the state pension.
The full new state pension sum is currently set at £179.60 per week for those who are eligible.
National Insurance contributions are the key element to consider when it comes to the amount people set to receive from the state pension.
The Government has explained people will usually need at last 10 qualifying years of NI to get any state pension at all.
These, however, do not need to be 10 qualifying years in a row.
This means for at least 10 years, a person was either:
- Working and paid NI contributions
- Paying voluntary NI contributions
- Receiving National Insurance credits, for example, those unemployed, or a parent or carer
But many Britons will be striving for the full state pension sum to give them support throughout retirement.
A total of 35 years of National Insurance contributions are typically required to receive this full sum.
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Therefore, those who have between 10 and 35 qualifying years can expect to receive a proportion of the state pension.
But many Britons will be keen to understand their own specific state pension entitlement.
This is likely to help them plan for the future, and grasp their financial situation more firmly.
Thankfully, there is a service which allows individuals to do so, and in a variety of ways.
The state pension forecast tool is primarily available online, through the Government’s official website.
The service can help Britons find out how much state pension they could get, when, and how to potentially increase it.
However, it cannot be used by those who are already getting their state pension or if someone has delayed claiming it.
These individuals will need to contact the Pension Service if they are in the UK, or the International Pension Centre if they live abroad.
But for individuals who are able to plan ahead, the online tool is not the only way to do so.
If a person reaches state pension age in more than 30 days, they can also fill in what is known as a BR19 application form and send this by post.
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Alternatively, Britons can call the Future Pension Centre for more details, who will then post the forecast out to the individual concerned.
The state pension triple lock bumper increase could have a significant impact on what people are set to receive.
But the Chancellor Rishi Sunak has seemingly alluded to the fact the increase may not be as significant as figures currently project.
He stated the Government would approach the matter with “fairness to both pensioners and taxpayers” which led some to doubt the triple lock’s future.
Steven Cameron, Pensions Director at Aegon, said: “The Chancellor has some extremely difficult decisions ahead as he seeks to get the UK’s long term finances back on a sounder footing after unprecedented spending to support jobs and business during the pandemic.
“We strongly welcome his indications that he will approach decisions ‘with fairness in mind for pensioners and taxpayers’.
“Every generation has been affected by COVID-19, whether in terms of health and/or wealth, so future policy needs across all Government departments needs to be looked at through an intergenerational fairness lens.
“The ‘levelling up’ agenda shouldn’t just be about geography – it should also look at other factors such as age.”
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