Newsletter Summer 2016

State pension changes

If you are due to reach state pension age on or after 6 April 2016, you should receive the new single-tier state pension, rather than the old-style state pension which was made up of lots of elements. However, you are not automatically entitled to a state pension just because you have lived in or worked in the UK.

To receive any of the single-tier state pension, your national insurance record must show that you have paid or been credited with National Insurance Contributions (NIC) for at least ten years. NI credits are added to your NI account when you are paid between £112 and £155 per week (2016/17 rates). You may also receive NI credits in other circumstances, such as when you claim child benefit for a child aged under 12 and you are not working.

It is possible to patch-up your NIC record by paying voluntary Class 3 NIC, or Class 2 NIC in some cases if you are self-employed or live abroad. Before deciding whether to pay voluntary contributions, you should ask the Pensions Service to send you a state pension forecast, so you can assess whether or not such contributions are worthwhile.

Another factor that will affect the level of your state pension is whether you were contracted out of the second state pension prior to 6 April 2016, and paid into a private pension instead. Contracting out is not possible after 6 April 2016.