What You Need to Know About UK Old Age Pension
UK old age pension or the Basic State Pension is a form of government-regulated savings scheme that can be accessed by all its citizens.
The number of your National Insurance Contributions (NICs) determines the amount you will receive upon retirement.
Facts about the UK Old Age Pension
- Its original goal when it was first established in January 1909 was to prevent poverty in old age. At that time, you had to be 70 years old to be eligible for UK old age pension.
- As of 2010, both men and women have to be 65 years old in order to get the full basic state pension. By 2046, this age limit will be increased to 68 years old.
- As of 6 April 2010, you can have access to your funds if you are 55 years old (provided you satisfy the conditions). On the other hand, you can defer receiving any amount from your pension until you are 75 years old.
- The Basic State Pension is taxable. But it is unlikely for those who have low personal allowance (less than £9,500) because it is lower than the required tax threshold.
Contributions to UK Old Age Pension
- For those who are still working today, it is probable that the old rules apply to you in order to qualify the UK old age pension where the required contributions are for 44 years during your qualifying years (16-65).
- After establishing The UK Pensions Act 2007, the required contributions during your qualifying years were brought down to 30.
- You can still avail the UK old age pension even if you did not meet the minimum 30 years of contribution. Just “pay” for those extra years you need to be eligible for the full monthly payment from the government.
- For full-time caregivers of disabled individuals or for those who have special reasons not to go to work, you can also pay the required number of National Insurance contributions. Visit the website of the UK government for all the details.
- If you did not make it to the 30-year quota of NICs, you can still get a partial pension.
- If you have been working overseas and your payments lapsed, you still have to catch up with all the contributions you have missed. Contact your local DSS office who will advise you in this regard.
- If you are an employee, you can also be eligible for the State Second Pension, also known as the SERP (State Earning Related Pension). Contact the DSS office for further details.
UK Old Age Pension Values
For 2012/13, the amount is set to £107.45 a week for a single person and £171.85 for spouses/partners. It will still depend on your NICs during your qualifying years but you can increase your UK old age pension by paying the Class 3 Voluntary NI Contributions. You can read more about pension history here.
You can contact us and talk to our reputed financial advisor for a more detailed explanation of your UK old age pension.