The New Flat Rate State Pension

FAQ We have at last received details of  the new state pensions system which is designed to simplify the current complicated system. It will be the biggest overhaul of the state pensions system in 50 years. What does it mean for our clients ? How much is the new flat rate pension ? From April 2017, a new single weekly flat rate of £144 (in today’s money) for all pensioners will replace the current system. The graduated, basic state and the state second pension will be merged into one, and the means testing complexity of Pensions Credit will be abolished. The pension will increase in line with the average growth in earnings. How many years national insurance payments will I need to qualify for the maximum ? An individual will require 35 qualifying years of national insurance contributions/credits to qualify for the full rate (increased from 30 years) After 35 years, no further benefits will accrue. You will need to have amassed at least 7 to 10 qualifying years to receive a benefit. If you have accrued fewer than 35 years but above the minimum number of qualifying years you will receive a pro-rated amount. The focus will be on individual qualification, inherited or rights from a spouse or civil partner will cease. When will I receive my state pension ?  The state pension age will be increased to 66 by 2020, then to 67 between April2026 and April 2028. Due to increasing longevity, the age will be reviewed every 5 years. What if I have reached state pension age before April 2017 ? There’ll be a sharp cut-off point - the new pension won’t be available to those 11 million people who have already reached their state pension age by April 2017. Due to the inherent complexity of the current state system, transitional measures will address the issues of state pension benefits accrued prior to the implementation of the single tier pension. Form BR19 can be submitted to DWP to obtain a Pension Forecast or check out source: Nicola Smith, L&G Pensions Analyst   Blog posted by Helen Tandy     SGOBPenBlg/01.03.2013