Pensions

What is a Pension? A pension is a source of regular income to live on in your retirement. Pensions fall into the 2 following categories

The State Pension: the basic State Pension and the additional State Pension.

What is the State Pension? The State Pension is made up of: Basic State Pension and Additional State Pension You may be able to get either State Pension or both when you reach State Pension age if you meet the qualifying conditions.

What is State Pension age? State Pension age is now 65 for men 60 for women Women’s State Pension age starts to increase gradually from 60 to 65 from April 2010. What your State Pension age will be will depend on your date of birth. From 6 April 2020, the State Pension age for both men and women will be 65.

Basic State Pension How do I qualify for the basic State Pension? You can get a basic State Pension by building up enough qualifying years before State Pension age. A qualifying year is a tax year in which you have enough earnings on which you have paid, are treated as having paid or have been credited with National Insurance (NI) contributions. In 2006/2007 you need to have £4,345 or more in earnings if you are an employee or £4,465 or more if you are self employed. Also, by State Pension age, you need to have one qualifying year from NI contributions you have paid or from NI contributions treated as being paid to be eligible for any State Pension. You will not be eligible for any State Pension if you have one year of credits.

What if I have not always worked? If you have not always worked, you may be entitled to credits or Home Responsibilities Protection, depending on your circumstances. Credits In certain circumstances you may get NI credits instead of having to pay NI contributions yourself. If you have received a benefit or allowance, such as: Carer’s Allowance Jobseeker’s Allowance Incapacity Benefit Working Tax Credit Maternity Allowance Statutory Sick Pay Statutory Maternity Pay Statutory Adoption Pay; or Unemployability Supplement You may have been credited with NI contributions for that period. These credits can help you to build up qualifying years towards your basic State Pension. You may also get credits if you were incapable of work or unemployed and available and actively looking for work even if you were not getting benefit.

Home Responsibilities Protection You may be entitled to Home Responnsibilities Protection if you have not worked, or your wager are low (less than £4,368 in 2006/07) or you have not received enough credits in any tax year while: Looking after children under 16 and Child Benefit is paid to you; Looking after a person with a long-term illness or disability; or Registered as a foster parent from April 2003 throughout the tax year. Home Responsibilities Protection may reduce the number of qualifying years you need to earn a full basic State Pension.

Further information on the State Pension , Personal Pensions or Return to Pensions Homepage.

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