The State pension rules have changed and more is coming. If you’re over 55, approaching retirement, or recently retired, or if you care for someone you should check out how the changes might impact you. Here are the state pension changes in brief…

• What has changed
• When will it change?
• Will it affect me and what should I do?

Updates from March 2011:

• If you care for someone for at least 20 hours per week you need to apply for Carer’s Credit by 5th April
• As of April this year you don’t have to retire at 65. You could carry on working if you want to.
• Listen to Jasmine’s fantastic iTunes podcast where she talks about the changes to the State Pension and how they might affect you.
• Don’t forget to take a look at the advice Moneymagpie offers on the special benefits, perks and discounts for the over 60′s as well.

What has changed?

As people are living for longer (hurrah!) the government has had to come up with some ways of making the pension fairer and more equal. So they’ve decided to:

• Increase the State Pension age (the age you are entitled to claim your pension). It’s currently 65 for men born before 6th April 1959, and 60 for women born on or before 5th April 1950. The age will gradually rise until 2020 when it will be 65 for women born on or after 6th April 1950. By 6th April 2020 both men and women can retire at 65. If you’re a woman and about to retire, check to see when your date is now. It could be 61 so check at Directgov’s State Pension age calculator.
• Lower the amount of National Insurance contribution years you need to claim a full basic State Pension to just 30 years for everyone.
• Stop people claiming an “Adult Dependency Increase.”
• Make things easier for parents and carers (including registered foster carers) when it comes to building up their National Insurance contributions.
• Allow men and civil partners to claim an increased basic State Pension based on their spouse or civil partners National Insurance record.
• Allow you to continue working after the age of 65 if you want to (from October 2011)

When will it change?

The majority of changes to the State Pension have started to happen already so it’s important that you get to grips with how they might affect you and what you need to do. Don’t worry though; it’s not as complicated as it sounds!

N.B. if you want to carry on working after you’re 65, as of April this year you can. You can retire at that age too but if you want to – or need to – carry on working then your boss can’t stop you. So you could:

• carry on working and claim your State pension (paying less tax and no National Insurance)
• or delay claiming your State pension and continue working (if you do then you can either get a lump sum payment when you do retire or get a higher monthly amount from your pension)

Will it affect me and what should I do?

The rise in State Pension age

For the time being it’s only women approaching retirement age who will be seriously affected by this change. If you have already retired it won’t affect you, but if you are a long way off retirement be warned that you might be waving goodbye to work later than you hoped. As of April 2046 the retirement age for both men and women will be 68 (and it’s possible that that age will come in even earlier). Let’s hope that by then 70 is the new 40!

In fact, here are the dates that you will be able to retire (on the State) depending on when you were born:

As of now…

The State Pension age is 65 for men born before 6 April 1959.

For women born on or before 5 April 1950, State Pension age is 60.

The State Pension age for women born on or after 6 April 1950 is increasing to 65 between 2010 and 2020. Check the State Pension age calculator to find out what it is for you.

From 6 April 2020 the State Pension age will be 65 for both men and women.

Changes from 2024…

Between 2024 and 2046 the State Pension age will increase for both men and women. This increase will be gradual, happening over two years every decade. The changes will mean that:

• State Pension age for men and women will increase from 65 to 66 between April 2024 and April 2026
• State Pension age for men and women will increase from 66 to 67 between April 2034 and April 2036
• State Pension age for men and women will increase from 67 to 68 between April 2044 and April 2046

The age you can get your State Pension will be determined by when you were born.

You can find out exactly when you will be able to get your State Pension by using the State Pension age calculator.

What should I do?

For anyone wanting to know when they can start claiming their pensions, the State Pension age calculator will give you the answer in seconds.

National Insurance contributions

It used to be that to qualify for a full basic State Pension (which at the moment works out as £95.25 a week) men needed 44 years worth of National Insurance contributions and women 39. Now, though, you only have to have 30 years for both men and women.

What should I do?

Nothing unless you’re coming up to retirement imminently. These changes should take place automatically. But if you’re in any doubt then contact your local pension centre for advice. Also, you can find out through Directgov how many years of National Insurance contributions you have made so far. If you need to ‘buy back’ some years you can do that. Most people can buy back up to six years-worth but for some women they can buy back up to 12 years.

If you are looking for the best way to increase your pension pot, visit our Pensions section for easy-to-follw tips on how to get the most from your scheme.

Gaps in National Insurance contributions

If you’re a carer or parent and worried that you won’t be able to claim a full basic State Pension because of gaps in your National Insurance contributions, these new changes could make you eligible for credits. The exact rules of eligibility are yet to be confirmed, but you’ll want to keep a close eye on the new rules if any of the below apply to you:

• You receive Child Benefit for an under 12.
• You’re an approved foster carer.
• You care for a sick or disabled person for more than 20 hours a week.
• It has been certified that the person (or people) that you are caring for needs that assistance.

What should I do?

If you’re already claiming a Carer’s Allowance or Child Benefit for an under 12 then you probably won’t need to take any action. If not then you will need to claim credits. Check Directgov for more information

If you’re unsure whether or not you will be affected by these changes, click here.

Even if you’re not a parent or carer you should still find out if you can claim credit as lots of people are eligible.

For more information on how to top up your National Insurance contributions, click here.

What’s “credit?”

Credit allows you to build up your State Pension even if you’re not making National Insurance contributions.

What if I’m married or in a civil partnership with a member of Her Majesty’s forces?

If you’ve missed out on making National Insurance contributions because of being away with your partner or spouse on an accompanied assignment, good news might be coming your way. Check Directgov for info on whether you can claim credits.

Married men and civil partners

It used to be that only some married women could get an increased basic State Pension based on their husband’s National Insurance record. Sound unfair? Well now both married men and Civil Partners are also able to boost their basic State Pension, but only if all of the following applies:

• You are married or in a civil partnership.
• Both you and your spouse or civil partner have reached retirement age.
• You are not already entitled to a full basic State Pension.
• Your spouse or civil partner was born on or after 6^th April 1950.
• Your spouse or civil partner qualifies for some basic State Pension.

Is it worth it?

Definitely. If all of the above applies then you could potentially claim nearly 60% of the full basic State Pension! According to Directgov this would currently work out at around £57.05 per week, more than enough to bag yourself a few extra weekly treats.

But I don’t live with my spouse/civil partner….

It doesn’t matter, regardless of whether you live with your spouse/civil partner you can still claim.

What should I do?

If you and your partner are both currently claiming State Pension you should automatically be receiving what you are due. But if your partner is at retirement age and doesn’t want to claim his/her pension, you can still claim for a rise in your basic State Pension. Either way call your local pension centre to make sure you’re getting what you deserve!

What if I care for a child or relative?

Parents Credit and Carers Credit mean that more parents and carers will be able to qualify for the basic State Pension in the same way as if they were paying National Insurance contributions. So…

• if you take a career break to look after children under 12 or
• if you care for someone for at least 20 hours a week

You should qualify for one of these credits. This means that you will still get your full State pension when you retire.

What if I don’t have the full amount of National Insurance payments?

If you don’t have the full number of qualifying years you might be able to either:

• get about 60% of a full basic State pension through your spouse or civil partner if they have a good National Insurance record or
• buy up to 12 years of voluntary contributions to plug gaps, depending on your age. If you’ve reached state pension age since the 6th April 2008 you may qualify for back-dated payments but check Directgov to see if you qualify.

Useful Links

• For more information on anything to do with State Pensions or the changes which are taking place, visit Directgov
• Listen to Jasmine’s fantastic iTunes podcast where she talks about the changes to the State Pension and how they might affect you.
• To find your local pension centre, click here
• Take a look at the advice Moneymagpie offers on benefits for the over 60′s