Andrew Tully, technical director, Canada Life commented on the milestone: “The State Pension is an incredibly valuable part of the retirement eco system in the UK and is playing it’s part in helping boost the retirement income prospects of millions of people. However, the State Pension is far from generous, with the onus really on individuals to take personal responsibility to save if they wish to enjoy their retirements.
“The state system is complex and difficult to navigate, but there are two key takeaways. Firstly, go online and spend two minutes checking your State Pension age, as the goal posts continue to move, especially for younger people. Secondly, use the online system to get a forecast of your State Pension which will confirm your likely entitlement. If there are gaps in your NI records, the earlier you know the sooner you can take steps to address the problem.
“A financial adviser will be best placed to not only help you plan for your retirement but also help you navigate the State Pension system.”
New State Pension Factoids
• There are currently 1,586,618 claimants of the new State Pension
• You need 35 years NI records to qualify for the full new State Pension
• As at April 2019, 7,819,400 working age people had the full 35 years NI record
• 406,7871 people receive less than £150 a week under the new State Pension
• Transitional arrangements mean anyone with a NI record as at 6th April 2016 could receive more or less than the full rate of the new State Pension with the full 35 years NI record, depending on their individual circumstances
• Your state pension age is based on your birth date. Currently it is age 66 for men and women (it moves to age 67 and then 68 for younger people, although there are no current plans to extend it further)
• 94,516 people in receipt of the new State Pension have moved overseas
• Top five overseas destinations are Australia (11,620 people), followed by Spain (10,765 people), Ireland (10,458 people), France (9,569 people) and USA (7,919 people)
• 27,871 people who have moved abroad have had their new State Pension frozen, meaning it doesn’t increase in line with the current triple lock guarantee
• The State Pension increases each year in line with the triple lock guarantee, which is the higher of inflation, earnings or 2.5%
• The new State Pension has increased by 15.4% since April 2016 (from £155.65 a week to £179.60 from April 2021)
• To buy the equivalent new State Pension of £179.60 a week would cost you around £320,000 using an inflation-linked annuity at today’s rates
• You can elect to stop/start your pension once in payment, but only once. In 2018/19 14,300 people elected to stop received their state pension while a further 1,500 chose to restart
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