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Changes ToState Retirement

Pensions

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What’s Changing

Rise in State Pension AgeKnock on effects for Pension Credit, Winter

Fuel Payment, HB/CTB Personal Allowances, Concessionary Travel

Simpler, more equal pensionsIncreased entitlement

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Rise in State Pension Age 

April

For women - age rises from 60 to 65 2010 - 2020

Age for pension credit etc* rises 2010 - 2020 with women’s state pension age

 

For all - age rises from 65 to 68 2024 - 2046

* Winter Fuel Payment, HB/CTB Personal Allowances, Concessionary Travel

NHS Benefits currently stay at age 60, may be change in future

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Simpler, more equal pensions April

Simpler contribution rules 2010 Less qualifying years needed 2010

New weekly credits for parents & carers 2010 More rights for civil partners, wives & husbands 2010

Abolish adult dependant increase 2010

Simplify State Second Pension 2010 - ? Increase basic pension with earnings 2012 ?

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When do changes begin?

Changes always start at beginning of National Insurance Contribution Year

6th April

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State Pension Age

Women Men

Until 2010 60 65

2010 – 2020 phased 65

From 2020 65 65

2024 – 2026 66 66

2034 – 2036 67 67

2044 – 2046 68 68 

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Contribution Condition New Rules from April 2010

Paid, ‘treated as paid’ and credited contributions all count equally

30 qualifying years are needed for a full basic pension

1/30th of full basic pension is paid for each qualifying year

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Contribution ConditionsPrevious Rules

1ST CONDITION Paid or treated as paid 1 year's contributions

2ND CONDITION 

Paid, treated as paid or credited Enough qualifying years across working life

Both conditions had to be met

 

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Contribution ConditionsPrevious Rules

Number of qualifying years needed for full basic pensionWomen 39Men 44

Minimum number of qualifying years (25%) needed for any Basic Pension to be paid

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Home Responsibilities ProtectionFrom April 2010

Weekly Credits if one of the following applies:Child benefit for a child aged under 12Foster parentCaring for a disabled person & not on carer’s

allowance

Previous years’ HRP converted to credits

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Home Responsibilities ProtectionPrevious Rules

Reduced number of qualifying years needed for full basic pension

Awarded for each complete tax year where one* of the following applies:Child benefit for a child aged under 16Foster parentCaring for a disabled person (see CPAG p752)

* A combination is allowed in some circumstances

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Marital Status & PensionsNew Rules from April 2010

Spouses & Civil Partners-reduced rate basic pension (Cat B) on NI of spouse / civil partner

Separated Spouses & Civil Partners-reduced rate basic pension (Cat B) on NI of spouse / civil partner

For men & civil partners, spouse / civil partner must be born after 5th April 1950

Previously only wives qualified for these Cat B pensions

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Marital Status & PensionsNew Rules from April 2010

Cat B pensions can be claimed

where spouse / civil partner

has deferred their pension

Previously

Husband had to claim pension for wife to claim Cat B

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Adult Dependant Increase

Claimed for spouse / civil partner under pension age

Abolished from 6th April 2010

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Worst Deal Still living with spouse / civil partner or separated

Can increase basic pension up to 60% of their basic pension when they reach SP Age (CAT B)

Better deal Divorce

Can increase basic pension up to a full basic by substituting chunk of ex’s NI record for yours (CAT A)

Best Deal Bereavement

Can increase basic, additional and GRBFor all deals - amount depends on your spouse’s / civil partner’s NI

- only NI of last spouse / civil partner can be used

For better or worse?