State pension changes
If you are due to reach state pension age (SPA) on or after 6 April 2016, you will receive the new “flat rate” state pension. People who start to receive their state pension before that date won’t be affected by this change.
The maximum state pension payable for 2016/17 is expected to be £150 per week. But you may not receive that full amount, it depends on how many “qualifying years” you have accrued by the time you reach the SPA. A qualifying year is a full tax year of NI contributions or NI credits (or combination of these two).
Facts to note about the new flat rate state pension are:
- you will need a minimum of 10 qualifying years to receive any of the flat rate state pension;
- the full flat rate pension will only be given where you have 35 qualifying years, the current maximum is 30 years;
- the SPA at 6 April 2016 will be 63 for women and 65 for men, but those ages are due to rise in later years.
If by 6 April 2016, you have built up an entitlement to the current state retirement pension that exceeds the maximum expected flat rate amount, you will receive that higher amount of state pension.
You can boost your state pension entitlement at any age by paying voluntary class 3 NIC’s. If you are due to reach SPA before 6 April 2016, you will also be able to buy addition state pension entitlement by paying class 3A NICs rom 12 October 2015.
We can help you maximise your state pension by advising on the optimum salary to take from your company.