In the UK, the State Pension age is about to rise, and it’s important to be prepared for this change if you are planning for retirement. The State Pension age will begin increasing from 66 to 67 next year, with all men and women across the UK reaching 67 by 2028.
This change has been in legislation since 2014 and follows a plan to gradually increase the State Pension age, with another rise to 68 scheduled for between 2044 and 2046.
Why Is the State Pension Age Increasing?
The increase in the State Pension age was first brought about by the Pensions Act 2014, which advanced the rise from 66 to 67 by eight years. This decision changed the way the pension age increase would be phased. Now, instead of a specific date when everyone reaches the State Pension age, those born between March 6, 1961, and April 5, 1977, will be able to claim their State Pension once they turn 67.
Another major shift is that the UK government plans to review the State Pension age regularly, at least once every five years. These reviews are based on the idea that people should spend a certain portion of their adult lives receiving the State Pension.
A review of the increase to 68 is expected before the end of this decade. Originally planned by the previous Conservative government for 2026, the review will take into account factors such as life expectancy and may lead to further changes to the pension age.
What Will Be the Impact of the Increase?
It’s important to know when your State Pension age will change, especially if you have made plans based on the current rules. The Department for Work and Pensions (DWP) will send letters well in advance to everyone affected by the changes, so you will know when to expect the rise.
The next increase after the shift to 67 will happen between 2044 and 2046, raising the State Pension age from 67 to 68. The Pensions Act 2007 has set this plan in motion, though it’s still subject to review and approval by Parliament.
How Do I Find My State Pension Age?
To find out when you can start claiming your State Pension, you can use the online tool on GOV.UK. This is an essential step in retirement planning, as it tells you exactly when you will be eligible for your State Pension. It can help you make informed decisions about how to save and invest for your future.
Can I Boost My State Pension Payments?
In addition to knowing when you can claim your State Pension, you may also want to consider how to boost your payments. HM Revenue and Customs (HMRC) recently announced that over 10,000 people have made over £12.5 million in payments to boost their State Pension. You can do this by filling any gaps in your National Insurance (NI) record.
If you are aged 16 or over, you may be able to make voluntary contributions to enhance your State Pension. For men born on or after April 6, 1951, and women born on or after April 6, 1953, voluntary contributions are an option to increase your pension.
Some people may qualify for NI credits, which can fill in gaps in their record instead of making contributions. If you’ve been sick, unemployed, or took time off to raise children or care for family members, you may be eligible for these credits.
How Do I Make Voluntary Contributions?
You can check if you have any gaps in your National Insurance record by visiting the GOV.UK website and using the State Pension forecast tool. The tool has been used by over 3.7 million people since its launch and can give you a clear picture of your contributions and how to fill any gaps.
For those who want to make voluntary contributions, the process has been simplified through the new NI payment services, which launched in April last year. To make a payment, you can log into your personal tax account or the HMRC app. The system also helps you decide whether it’s worth paying to fill in gaps, so you don’t end up paying for more years than necessary.
Should I Boost My State Pension?
While it may be tempting to top up your State Pension, you should carefully consider whether it’s necessary for you. Alice Haine, a personal finance analyst, explains that you need at least 10 qualifying years of National Insurance contributions to receive a State Pension at all. If you want to receive the full pension, you’ll need at least 35 years of qualifying contributions.
If you’ve taken a career break or had a low income in the past, you may need to fill in some gaps. However, it’s important to assess whether the costs of making voluntary contributions are worth the benefits. For those unsure, it may be a good idea to get financial advice or use the forecast tool to help you make a decision.
With the State Pension age increasing from 66 to 67, it’s essential to know when this change affects you and to adjust your retirement plans accordingly. If you want to boost your State Pension, consider making voluntary National Insurance contributions.
Check your record, see if you have any gaps, and determine if it makes sense for you to pay to fill those gaps. By taking these steps now, you can ensure a more secure financial future for your retirement.
Source: https://www.bristolpost.co.uk/news/cost-of-living/dwp-new-state-pension-age-10164873
FAQ’s
What is the State Pension age and when will it increase?
The State Pension age is the age at which you can start receiving your State Pension. The age is set to increase from 66 to 67 by 2028, and there are plans for it to rise to 68 between 2044 and 2046.
How can I check my State Pension age?
You can check your State Pension age using the online tool available on GOV.UK. This tool will tell you the exact date you can start claiming your State Pension.
Can I increase my State Pension payments?
Yes, you may be able to boost your State Pension by making voluntary National Insurance contributions to fill any gaps in your NI record. You can do this through the new HMRC digital service.
How years of National Insurance contributions do I need for the full State Pension?
To receive the full new State Pension, you need at least 35 qualifying years of National Insurance contributions. You can check your NI record to see if you have any gaps that need to be filled.
What happens if I don’t fill the gaps in my National Insurance record?
If you have gaps in your National Insurance record, you may not qualify for the full State Pension. Filling in these gaps can increase the amount you receive, but you should check if it’s worth the cost of paying for missing years.
