State Pension changes: The huge change which will take place NEXT WEEK – What is it?

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State Pensions are a lifeline for people up and down the UK, topping up retirement funds and allowing for those of State Pension are to leave work. Each year, between 650,000 and 700,000 Brits reach State Pension age – a requirement of receiving the payout.

State Pensions are separated into two categories, the basic State Pension and new State Pension.

The basic is for those born before April 6, 1951, if you are a man, and those born before April 6, 1953, for women.

The most you can get is £134.25 per week on the basic State Pension.

If you were born later than this you will be eligible for the new State Pension.

The full new State Pension amount is £175.20 per week.

However, there are changes coming for those looking to claim State Pension.

From Tuesday, October 6, the State Pension age is increasing from 65 to 66.

This means anyone born after October 5, 1954, will have to wait an extra year before claiming their State Pension.

The rise in State Pension age was announced by then Chancellor George Osborne in 2010.

A further rise in the age Britons are eligible to claim their pensions is due in 2028.

In 2028, State Pension age is due to increase to 67, before rising once more to 68 by 2044.

However, there have been suggestions this could be brought forward to 2037.

You can calculate your State Pension age by using the Government’s handy calculator here. 

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How much State Pension will I get?

The amount of State Pension you will be paid depends on your personal National Insurance record.

You usually require 10 qualifying years on your National Insurance record to receive any of the new State Pension.

When you’re working you pay National Insurance and get a qualifying year if:

  • you’re employed and earning over £183 a week from one employer
  • you’re self-employed and paying National Insurance contributions

You might not pay National Insurance contributions because you’re earning less than £183 a week.

You can check how much State Pension you are projected to receive based on your current National Insurance record here. https://www.gov.uk/check-state-pension

Each year the State Pension increases in line with the triple lock scheme.

This means the payment increases by whichever is highest out of wage growth, price rises or 2.5 percent.

In April 2020 the State Pension amount increased by 3.9 percent, however, following the impact of coronavirus on the economy there have been calls to scrap the triple lock scheme.

Economists are predicting the scheme could see State Pensions increase by 7.6 percent over the next two years.

Experts say this would cost £3 billion more in 2022 than if State Pension kept pace with earnings.

However, the Government has so far kept its pledge to maintain the triple lock system.

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