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State pension

State Pensions are always a topic of debate. Currently they provide a guaranteed income upon retirement for those who have paid in a minimum amount of National Insurance Contributions. There are currently 2 levels of state pension:-
Level 1 is currently (2009/2010) £95.25
Level 2 (S2P) is Earnings Related
Some people have chosen to opt out of the S2P (previously SERPS) in favour of contributions being added to a Personal Pension.

Retirement Age

The state retirement age is increasing as follows:

Retirement Age for Women

The current UK retirement age for women is 60
* From 2010 the retirement age for women will increase so that by 2020 it will also be age 65. This will not affect women born before 1950
* Women born after 6th April 1950 and 5th April 1955 will have a retirement age between aged 60 and 65
* Women born from 6th April 1955 will have a retirement age of 65

And it doesn't stop there between 2024 and 2046 the retirement age for Women is set to increase again to age 68. This will be a gradual increase so keep this in mind when arranging your pensions.

Retirement Age for Men

The current UK retirement age for men is 65

Between 2024 and 2046 the retirement age for men is set to increase again to age 68. This will be a gradual increase so keep this in mind when arranging your pension.

National Insurance Contributions

To qualify for the state pension you must have paid a certain amount of qualifying years of National Insurance Contributions. For men it is 49 years and women 44 years (dependent upon when you were born). A qualifying year is classed as a year where you earned enough to pay NI contributions or where you have been credited with National Insurance contributions. If you have not contributed full national insurance but have more than 25% then you will be rewarded with a proportion of the full pension. If you reach retirement aged on or after 6/4/2010 then you will need to have contributed 30 years to receive a full basic pension. Read more about national insurance contributions here.

Changes from April 2010

From 6th April, 2010 there will be no increase in your state pension for an extra adult. If you already claim this additional benefit, you will continue to be paid it until you no longer meet the qualifying conditions, or until April, 2020; whichever is the soonest.

Moving Overseas

The good news is that you don't loose your entitlement to your State Pension if you choose to retire and spend your retirement years in a sunnier climate. Your pension can be paid into your UK bank account, into an overseas bank account, or you can be sent a cheque every 4 or 13 weeks. It is always best to notify the correct agency as soon as you know you are moving abroad to give you longer to organise everything.

S2P Previously SERPS

With regards to S2P then you would need to be employed and earning above a certain amount to qualify, the amount you receive depends on the amount of National Insurance Contributions you have paid along with the Government Policy although Self Employed people are not eligible for the S2P scheme. If you have previously contributed under the SERPS scheme then any contributions made before April 2002 will be protected even if you not reached retirement age by 08/2009
Approximately 4 months prior to retirement age you should receive a claim form from the Pension Service, if this does not arrive then contact the Pension Service on 0845 300 1084 from 8am to 8pm, Mon to Fri (excluding Bank Hols) and 9am to 1pm on Saturdays.
If you have any other questions with regards to the S2P scheme then you can write to:-

The Pension Service
PO Box 1005
Newcastle Upon Tyne
NE98 1WZ
Tel: 0845 606 0265 8am - 8pm Mon - Fri (Excluding Bank Holidays
Fax: 0191 218 6061
Or online at The Pension Service

There are also many options to consider with regards to arranging your own Pensions, including Personal Pensions, Stakeholder Pensions and Final Salary Pension Schemes.

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