State Pension Changes
The current state pension is made up of a basic flat rate pension and a Second State pension. This two-tier system is to be replaced by a single-tier system from 6 April 2016.
The new state pension system will:
- only affect those who reach state pension age on or after 6 April 2016. If you reach state pension age before 6 April 2016, you will not be affected; you will continue to receive your state pension under the current rules.
- See the state pension age rise to 65 for women between 2010 and 2018, and then to 66, 67 and 68 for both men and women. The government has committed to carry out a review of the state pension age every five years
- Continue to allow you to put off claiming your state pension to accrue an extra weekly state pension. Currently your pension is increased by 1% for every 5 weeks that you put off claiming it. The Government has proposed that this rate be changed to 1% for every 9 weeks that you put off claiming it.
- No longer allow deferred state pension to be paid as a lump-sum payment. Currently if you put off claiming your state pension for at least 12 months in a row, you may choose to take a lump sum payment instead of extra pension. This is likely to be removed
If you are considering supplementing your state pension with a Private Pension, we strongly advise that you seek professional advice from a fully qualified and regulated Independent Financial Advisor. Pension decisions are usually a major financial decision that requires the appropriate level of advice to make the right choice. In contrast, mistakes can be costly. To arrange for a no obligations, initial free telephone consultation click here.