Posted by Malcolm Wallace | August 04, 2016
The New Single Tier Pension
There is still confusion about the State Pension, and with the introduction of the single tier pension we thought it might be useful to clarify the changes:
• The single tier pension was introduced from 6th April 2016. If you were already over State Pension Age you will continue to receive your state pension in line with present rules. If you reach State Pension Age after the new scheme starts your state pension will be based on the single tier system.
• The 2016/17 Single Tier Pension is £155.65 per week.
• Under the Government’s proposals, National Insurance contributions and credits awarded before the new single-tier system starts will be recognised. When single tier starts they will look at your National Insurance record and work out its value under the single-tier rules. At the same time they will work out what you may have got under the present state pension rules. For both valuations we they make a deduction to take into account any periods when you were contracted out of the additional State Pension. Also the minimum qualifying year requirement will apply. The higher of the two amounts will then become your single tier foundation amount.
State Pension provision is just part of your retirement income planning and should not be seen in isolation. If you want to discuss retirement planning or how the State Pension changes affect you please get in touch.