All About State Pension – What It Is & How It Works?

State Pension

Are you soon to reach your retirement age? Are you a UK resident? Like several welfare schemes, the UK government also offers a scheme for people in their official retirement age. What started with the Old Age Pensions Act in 1908 paved the way for the state pension prevalent today. At that time, the pension was fixed at 5 shillings per week. However, if you want to know all about state pension and how it works, read the blog thoroughly.

The new State Pension

At present, you can get a new state pension of £221.20 per week if you have already reached your state pension age. The eligibility criteria for the new state pension for men and women are not the same. For men, the birth date must be on or after 6 April 1951, whereas for women, it is on or after 6 April 1953. Remember, if your birthdate falls before these specified dates, you may not get the new state pension at all! Instead, you may get the basic state pension, and maybe even the additional state pension.

Sometimes, despite fulfilling these eligibility criteria, you may receive less than the stated amount for the new state pension. In such a case, you will need more national insurance qualifying years to get the stipulated pension of £221.20 per week.

Basic State Pension

Currently, you can get a basic state pension of £169.50 per week depending on your National Insurance record. However, it is a matter of fact that those eligible for the basic state pension have now already attained the new state pension age. Unless, or until you have delayed your state pension, you can claim your basic state pension.

Additional State Pension

This is the extra payment you could receive in addition to your basic state pension. The eligibility criteria for this additional state pension are different for both men and women. For men, the birth date must be before 6 April 1951, whereas for women, it is before 6 April 1953. Remember, if you fulfil the eligibility criteria, you will automatically receive this additional state pension. However, if you didn’t receive it due to some reason, you can still get the additional state pension from your partner. 

How it works

Unlike the additional state pension, you will not get the state pension automatically. So, if you are fulfilling the eligibility criteria, you must claim for it. The things that you will be required to do the same are as follows:

  • The latest date of your most recent marriage, civil partnership or divorce
  • The dates when you have spent your time living or working abroad
  • The details of your bank or building society

In case, you want to apply online, you must have an invitation code. Remember, you need to request this code if you are about to attain your state pension age within three months, and still, there is no invitation letter. It is also possible to claim your state pension by phone and post. There is also a provision for delaying or deferring your state pension if you feel so to increase your weekly payments. For example, if you defer by 52 weeks, you will receive a payment of an extra £12.82 per week. 

Moreover, if you feel you need more information, don’t hesitate to contact experienced UK accountants. It is always advisable to seek professional guidance to know your pension options.