Can you delay taking your state pension to get the higher rate? What happens if you don’t have 35 years of National Insurance?
If you're due to reach state pension age after April 5th 2016, you'll qualify for the new flat rate state pension. But how will it work and will it leave you better off than the current state pension system would?
Q. I’m due to retire before April 6th 2016. Can I delay taking my state pension until after then to get the higher rate?
A. No, I’m afraid you can’t. It doesn’t work like that. The key date is when you reach state pension age (that’s the date you become entitled to receive your state pension). It’s not the same as the date you take your state pension – because you can delay taking it – or the date you reach 65 or the date you stop work.
SAVVY TIP: Currently you can defer your state pension and either get a higher weekly pension or a lump sum. Under the plans for a flat rate state pension, you won't be able to take a lump sum.
Q. When do I have to be born in order to get the new flat rate state pension?
A. It depends on whether you’re a man or a woman and when the flat rate state pension is introduced.
• If you’re a woman, you won’t qualify for the new flat rate state pension unless you’re born on or after 6th April 1953.
• If you’re a man, you’ll receive the flat rate pension if you’re born on or after 6th April 1951.
SAVVY TIP: Quite a few of you have emailed me to say it’s unfair that women and men with the same date of birth will receive different pension amounts. The reason is that women’s state pension age is rising from 60 to 66 from 2010 to 2020, while men’s is rising from 65 to 66.
Q. I’ve only got 30 years of National Insurance contributions and I’m due to retire after 2016. I’m not working at the moment. Should I buy extra National Insurance?
A. In theory it’s probably a good idea to buy extra National Insurance so you’ll be entitled to the full flat rate pension. However, Malcolm McLean, a pensions consultant at Barnett Waddingham says it’s probably better not to do anything just yet. “Buying voluntary National Insurance contributions is a good deal, but the government say it may give people longer to buy the extra five years. So I’d advise waiting until we get some clarity.”
SAVVY TIP: The rate you pay for a year’s worth of National Insurance varies according to the year you’re buying it for (currently you can generally only go back six years and buy extra NI).
Q. I’m due to get my state pension after April 2016. At the moment I’ve got more than £151 a week because I’ve paid into SERPS and the state second pension. Will I lose out
A. On 6th April 2016, when the flat rate state pension comes in, the Department for Work and Pensions will look at the pension you’ve built up under the current system and what you’d be entitled to under the flat rate pension. You’d then be entitled to keep the better of the two. That would be the basis on which you’d carry on building up your state pension in the future.
Q. My mum is due to retire after 2016 but she was going to rely on my dad’s National Insurance record for her pension. I’ve heard she won’t be able to do that. What will she live on?
A. You’re right that women (and men) won’t be able to rely on their spouse or civil partner’s National Insurance record to increase their own state pension after the flat rate scheme has been introduced. However, there are some transitional rules which mean that women who've paid the Married Women's Stamp will be able to claim a state pension using their husband or ex husband's National Insurance record.
SAVVY TIP: If your mum had been due to retire before 2016 and your dad would have retired after April 2016, she would still have been able to claim a pension based on his National Insurance, even though his state pension date wasn’t until after April 2016. Sorry if this is complicated, but the government hasn’t exactly made it easy!
Q. I’ve paid the married women’s stamp. I’m due to retire in 2018. How am I affected?
A. If you’re due to reach state pension age on or after 6th April 2016 and you’ve paid the married women’s stamp – even if only for a week, you’ll be able to claim a state pension of 60% of the basic state pension that your husband or civil partner is entitled to.
The government's plans to raise the state pension age - when will you get yours?
Deferring your state pension - what are the options?
How can you increase your state pension?
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