Care and support

State retirement pension

What is it?

State retirement pension is a weekly pension normally paid once you reach pension age. It is usually based on your (or your spouse’s/civil partner’s) national insurance contribution record and is taxable.

Category A pensions are based on your own national insurance contributions record.

Category B pensions are based on your spouse’s/civil partner’s national insurance contributions and can be paid to married women, civil partners, widows, and some widowers and surviving civil partners.

Category D pensions are only paid to people aged 80 and over who do not qualify for either a category A or category B pension and also meet certain other criteria.

Who can claim?

You can claim SRP up to 3 months before you reach pension age, currently 60 for women and 65 for men. However the pension age for women will be equalised gradually to age 65, the same as it is for men, and this process will begin in 2010 and be complete by 2020. This means that women who reach retirement age during this period will have to wait longer before they will be eligible to receive their SRP.

Can I defer claiming my pension?

You can choose not to claim your SRP when you reach retirement age. If for example you want to continue working, or you have an occupational pension, you may wish to “defer” claiming. April 2005 saw the introduction of more generous rules which make it more worthwhile to consider deferring your pension:

• The deferment rate is 1% for every 5 weeks. This puts the annual rate at 10.4%.
• There is no longer a 5 year limit on the extent of deferment.
• You can choose to take a lump sum at the end of the deferment rather than an increased pension. The lump sum will be the amount of the pension not claimed, plus compound interest (based on 2% above the Bank of England base rate), so long as the deferment lasts at least 52 weeks.
• If you defer for less than a year and choose the lump sum instead of an increase, all you get back is the unclaimed pension with no interest added.
• If you are someone who has already opted to defer your pension, you will only get the option of a lump sum for any pension deferred after April 2005.
• The lump sum will be taxable (as it is made up of taxable income), but won’t count as capital when calculating means-tested benefits.

NB If you are claiming pension credit you will be treated as receiving your SRP even though you may have opted to defer it.

The DWP produce a leaflet on deferred pensions called Your State Pension Choice – pension now or extra pension later (SPD1) which is available from the pension service website www.thepensionservice.gov.uk

How much is paid?

The basic rate of pension for a single pensioner is £90.70 each week, and £145.05 for a couple. Some people may get more than the basic rate (e.g. if you earned a graduated or earnings related pension) or less than this (eg because of long gaps in your contribution record or if you paid reduced contributions at the married woman’s rate). Some couples may get more if they have both worked and each earned a pension in their own right - it all depends on your (or your spouse’s/civil partner’s) National Insurance record. Category D pensions are £54.35 a week.

How to claim

You must complete a claim form in order to get your pension – it will not be paid automatically. The form BR1 (BR 2488 for Category D pensions) is available from the pension service – they normally send this out to you four months before you reach pension age. If you have not received one and it is less than three months until you turn 60/65 then you should contact your local office and ask them to send you a form. You can claim your pension by telephone if you are within 4 months of pension age. Your details will be taken and you will be sent the form to check and sign. The service is available from 7am-7pm Monday to Friday on 0845 300 1084.

If you have access to the internet, you can download the claim form from www.thepensionservice.gov.uk

Backdating

Since 6 April 2006 all claims for state pension can be backdated for up to 12 months as long as you would have been entitled to claim.

State Pension Forecast

It is possible to check your contribution record by requesting a state pension forecast. This can be done at any time up until three months before you reach retirement age. The forecast will give you your current state pension entitlement based on the records held by H.M. Revenue and Customs.

To request a forecast ring the retirement pension forecasting team on: 0845 300 0168.

A new e-service that provides an online state pension forecast is now available by registering via the government gateway on www.thepensionservice.gov.uk/statepensionforecast

The forecast tells you in today’s prices:

• the amount of state pension you have already earned
• the amount of state pension you can expect at state pension age – based on what you have already earned and what you might earn before you reach state pension age.

In most cases the forecast can be provided online while you wait. You can also submit ‘what if’ questions to see how changes in your circumstances, such as retiring early, could affect your financial situation.