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The State Pension – What you need to know
The basic State Pension is a pension that the government pays to those who reach State Pension age. Eligibility for the basic State Pension is based on the number of ‘qualifying years’ a person has accumulated. These years are gained through the National Insurance Contributions (NICs) that a person has actually paid, has been credited with or has been treated as having paid throughout their working life. It is important to realise that the State Pension is not a lot of money. The state pension age will rise with longevity.
It is designed to keep retirees above the poverty line and not by too much. If you want to have a more comfortable level of life in retirement, setting up a STAKEHOLDER PENSION of your own could be a good idea.
Find out more about the Stakeholder Pension.
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For the 2013/14 tax year, the basic single state pension is £110.15 per week which many may find is insufficient in meeting even ordinary everyday expenses such as grocery and utility bills. When holidays, presents and other extras are taken into account, relying entirely on this sum may require a significant change in lifestyle.
If you’re married or in a civil partnership and expect your basic State Pension to be below £66 per week you could top it up to that amount
The government has announced a new ‘flat-rate’ state pension that will give pensioners £144 in today’s money. This will not take effect until 2017 at the earliest. From April 2017, 35 years (rather than 30 years) of National Insurance contributions will be required to receive the state pension.
See if you’re entitled to Pension Credit.
What are qualifying years?
Qualification for the basic State Pension is based on accumulating a sufficient number of qualifying years before reaching State Pension age. A qualifying year is a tax year where a person:
You can get an idea of how many qualifying years you have and what this means for you by using our State Pension Calculator.
How many qualifying years are needed?
The number of qualifying years a person needs for a full basic State Pension depends on their age and their sex:
A person who reaches State Pension age on or after 6 April 2010 needs just one qualifying year in their working life to qualify for some basic State Pension.
To work out your State Pension Age use our State Pension Age Calculator.
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Those who have been parents or carers A person who reaches State Pension age on or after 6 April 2010 may be able to get new National Insurance credits which allow them to build up an entitlement to the State Pension. They may be eligible for credits if they are:
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