Tag Archives: pension

State pension age rises force retirement plan changes – ‘vital’ funding guidance issued

State pension ages have been steadily rising in recent years as state legislation pushes retirement ages upwards. Currently, most people will reach their state pension age on their 66th birthday but this will rise over the coming years.

Canada Life detailed changes to state pension legislation have impacted the retirement plans of homeowners over 40, with only a quarter saying they will retire at their state pension age.

Nearly a third (31 percent) of respondents said they plan to work beyond their state pension age, with this increasing to 50 percent of the over 60s.

Equally, 34 percent plan to finish up work early and retire before their nominated state pension age. One in ten (11 percent) said they had already stopped working before their state pension kicked in.

When asked what they expect their main source of income to be in retirement, nearly a third (28 percent) of homeowners aged 40 and above expect the state pension will provide the “bedrock” of their income (22 percent for men vs 36 percent for women), even with the full state pension currently standing at just £179.60 per week, or £9,350 per year.

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When looking at what sources of income will be incorporated into retirement planning, a gender gap emerged.

Canada Life noted while men and women both expect to rely on the state pension equally, gaps emerged in the following assets:

  • Workplace pension – 67 percent (73 percent for men vs 61 percent for women)
  • Personal pension – 34 percent (38 percent for men vs 29 percent for women)
  • ISAs – 26 percent (30 percent for men vs 22 percent for women)
  • Financial investments – 15 percent (19 percent for men vs 11 percent for women)

“However, the amount received is not generous by any standard and, as a result, the onus is on individuals to take personal responsibility to save for retirement.

“Employees can build on the state pension and any workplace savings they have.

“Self-employed people face more of a challenge as they don’t have an employer to help fund their retirement.

“As the goalposts for the state pension shift, it is vital people check their state pension age, the amount they are due to receive, and whether they are eligible for the full state pension.

“It’s equally important that those who have spent time out of employment check their record, claim any National Insurance credits possible, and think about making any top-ups in order to be entitled to as much state pension as possible.

“Taking a proactive approach, seeking the help of an adviser, and making good decisions now will all help to fund retirements.”

Author: Connor Coombe-Whitlock
Read more here >>> Daily Express :: Finance Feed

State pension POLL: Should the free NHS prescription age rise to 66? Vote now

At State Pension age, Britons primarily become able to receive the all-important state pension sum to aid them in retirement. The payment is up to £179.60 per week, and is made available to those with enough National Insurance contributions. But aside from the state pension sum, those who have reached an eligible age often become entitled to other forms of support.

Attendance Allowance, for example, is an additional payment to support older people living with a disability or health condition.

However, for certain forms of support, individuals will not have to wait as long as the state pension age, at least, at present.

This is the case for those living in England who can unlock a free prescription at age 60.

But under consultations put forward yesterday, this age could change – to align with the state pension age.

READ MORE: Good news for savers as bank account ups ‘competitive’ interest rates

If the consultation were to find in favour of increasing the free prescription age in line with the state pension age it could mean more people are forced to wait longer to receive the entitlement.

However, one option which has been suggested is to introduce a grace period which would mean those aged 60 to 65 at the point of change can continue to receive a free prescription. 

Opinion has been somewhat split on the matter thus far. 

One Express.co.uk reader criticised the potential move as a “tax on the vulnerable” urging a reconsideration of the issue.

Health Minister, James Bethell, commented on the consultation.

He said: “We are committed to improving patient care and supporting the NHS with the funding it needs to recover from this pandemic.

“The upper age exemption for free prescriptions used to align with the state pension age, but that link has been lost over the years.

“Prescription charges are an important source of income for the NHS, and the costs of providing free prescriptions continue to increase with our ageing population.

“I encourage anyone with views on our proposals to share them through the consultation response form, available online on GOV.UK.”

Author: Rebekah Evans
Read more here >>> Daily Express :: Finance Feed

State pension warning as free NHS prescriptions age could be increased to 66

Reaching State Pension age means Britons can unlock the payment to which they are entitled, however, older age milestones often come with other forms of support. At present, even earlier than the state pension age, people in England are able to get a free prescription at the age of 60. Exemptions are also applicable to those under the age of 16 or young people who remain in higher education.

Understandably, free prescriptions are particularly important to many older people.

The entitlement means these individuals do not have to worry about additional health costs for their needs.

However, the Government has today launched a consultation which is debating whether the cut-off point for a free prescription should be raised to 66 years old.

This, of course, would be in line with the state pension age, but could see more people having to wait longer for the entitlement.

READ MORE: Mortgage prisoners: Rishi Sunak urged to act to help trapped Britons

But it is estimated this change could bring in up to £300million more for the NHS by the 2026/27 year. 

Currently, the prescription charge is £9.35 per item, however, those who need more regular medication may benefit from a pre-payment plan.

This pre-payment certificate usually costs £108.12 for a total period of 12 months. 

Health Minister James Bethell commented on the matter.

He said: “We are committed to improving patient care and supporting the NHS with the funding it needs to recover from this pandemic.

“The upper age exemption for free prescriptions used to align with the state pension age, but that link has been lost over the years.

“Prescription charges are an important source of income for the NHS, and the costs of providing free prescriptions continue to increase with our ageing population.

“I encourage anyone with views on our proposals to share them through the consultation response form, available online on GOV.UK.”

At present, in England, people receive free prescriptions upon turning 60 years of age.

The last time this was changed was in 1974 for women, and 1995 for men.

But another matter which has to be taken into consideration is the ever-rising state pension age which is likely to impact millions.

Due to the increase in life expectancy, the Government has plans to increase the state pension age in the future.

Between 2037 and 2039, the state pension age is planned to increase for both men and women to 68.

If the consultation were to go ahead and become policy, it could mean people are forced to wait even longer to receive free prescriptions.

The consultation period is set to run for eight weeks to allow Britons to contribute as much as possible. 

Author: Rebekah Evans
Read more here >>> Daily Express :: Finance Feed

State pension set to rise but nearly 500,000 British pensioners won't get boost

If a person lives outside of these countries, they won’t get the yearly increases.

Should the affected person return to live in the UK, then their pension will go up to the current rate.

The Department for Work and Pensions (DWP) issued guidance on the benefits and pension for UK nationals in the EU, EEA or Switzerland following the confirmation of a Brexit deal having been reached last year.

It states: “You can carry on receiving your UK State Pension if you move to live in the EU, EEA or Switzerland and you can still claim your UK State Pension from these countries.

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'Completely two-faced' – Outrage as British pensioners miss out on state pension boost

That’s not to say everyone will end up receiving the increased amount, however. Some people who retire abroad may find they are not able to receive the uprated state pension due to where they live.

This is because the payment only increases annually if the recipient lives in a country on a list of certain countries.

According to the End Frozen Pensions campaign group, it’s estimated nearly 500,000 British pensioners are unable to get the uprated amount.

A research briefing on frozen overseas pensions, available in the House of Commons Library, states in May 2020, there were 492,176 people overseas who are in receipt of a frozen UK state pension.

The vast majority (84 percent) of these people live in Australia, Canada or New Zealand.

It means their pension remains payable at the same rate as when they first became entitled to it, or the date they left the UK if they are already pensioners then.

Ian Andexser, Chairman of the Canadian Alliance of British Pensioners (CABP) and Nigel Nelson, the previous chair of The International Consortium of British Pensioners (ICBP), are among those are campaigning against the policy.

The campaigners, both of whom live in Canada, sat down – over Zoom – for an interview with Express.co.uk this week.

Frozen pensions, as the policy has become known, is an issue which has “been going on for many, many, many years”, Mr Andexser explains.

“The policy goes back now I think over 74 years,” he says, explaining the “active push” from the frozen pensions campaign group has been ongoing for just over 20 years.

“We’ve come a long way in that time. But we haven’t hit the final goal.”

The interview is taking place more than six months on since the confirmation of a Brexit deal being reached, back in December 2020 – days before the Brexit transition period came to an end.

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“And we have no problem with that, because that’s the way it should be.

“The problem we have is that the UK Government has said for many, many years, they were not prepared to enter any new agreements,” the campaigner continued.

“And that has been their argument with Canada, Australia, New Zealand, South Africa, and all of the frozen countries around the world.

“Predominantly, about 90 percent of frozen pensioners are living in the two countries Australia and Canada.

“So that’s primarily where the push has been.

“And it just strikes us as being completely two-faced by the UK Government to continue to deny a request to index our pensions using the argument that they weren’t making any agreements, and then turn around and make 27 new ones with EU countries, and not just EU countries.”

Last year, the Canadian Government requested the UK change the policy on the frozen pensions issue.

Earlier this year, the UK Government responded.

“It was a flat out, ‘No, we’re not going to consider any change to the effective policies that we have in place’,” Mr Andexser said.

A DWP spokesperson said: “We understand that people move abroad for many reasons and that this can impact on their finances.

“There is information on GOV.UK about what the effect of going abroad will be on entitlement to the UK state pension.

“The Government’s policy on the up-rating of the UK State Pension for recipients living overseas is a longstanding one of more than 70 years and we continue to uprate state pensions overseas where there is a legal requirement to do so.”

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This post originally appeared on Daily Express :: Finance Feed

State pension warning as many Britons missing out on extra £4,659 – act now

State Pension payments assist millions of people in retirement, but depending on the amount one receives, the sum may have to be stretched. To unlock the full state pension sum, it is usually the case a person will need at least 35 years of National Insurance contributions. Indeed, to receive anything at all from the state pension, some 10 years of contributions are required.

Regardless, though, of what people receive from the state pension, there could be an opportunity to boost income.

It is made available through the Department for Work and Pensions (DWP), the same body responsible for overseeing the state pension.

The payment in question is known as Attendance Allowance, and is available to many people of state pension age.

The sum is designed to assist those with a disability severe enough that they need someone to help look after them.

READ MORE: Pension: Britons may get up to £85,000 compensation for poor advice

Those who do have a carer, though, could tell this individual they could get Carer’s Allowance if substantial caring needs are involved.

Attendance Allowance is currently paid at two different rates, with the amount a person receives based on their circumstances.

Qualifying individuals can receive either £60 or £89.60 per week.

The lower rate, the Government states, is for those who need “frequent help or constant supervision during the day, or supervision at night”.

But for the higher rate, individuals will need to require help or supervision throughout both day and night, or be terminally ill.

Across the year, then, Britons may be entitled to up to £4,659 worth of support from this payment. 

Attendance Allowance is also not a means-tested payment from the DWP.

This means what a person earns or how much they have in savings does not impact the amount they receive.

Attendance Allowance, however, could open Britons up to a whole world of possibilities and assistance in their day to day lives.

The Government has confirmed some recipients may also be able to get additional Pension Credit, Housing Benefit or a Council Tax Reduction for their claim.

To apply, all Britons will need to do is use the Attendance Allowance claim form, accessible through the Government’s official website or the Attendance Allowance helpline.

Here, they can print this off and then send it by post, where a postcode and stamp is not required.

Attendance Allowance can be backdated to the date of a person’s claim. 

This is usually the date the form is received or the date an individual calls the enquiry line.

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Pension tax raid: Rishi Sunak's actions may leave retirees with just five years to act

He said: “The rumours swirling about the LTA over the last few days will represent a worry for pension savers across the country.

“Pensions by their very nature are a long-term product and it’s unfair of the government to constantly move the goalposts.

“While even pension pots of £800,000 or £900,000 sound like a very large pot of money to many, investment growth and compound interest can mean that the new LTA thresholds can be easier to hit than people may think particularly for those in public sector schemes.

“Our calculations show that someone with a £625,000 or a £700,000 pension pot and are five years away from retirement could be forced to hand over some of their hard-earned cash to the taxman if the thresholds are reduced to £800,000 or £900,000 respectively.

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State pension UK: Free bus pass qualifying ages will be changing – rules explained

State pensions can be claimed up to four months in advance of reaching the state pension age.

This should be noted carefully as state pensions are not paid out automatically, they will need to be claimed.

The Government will send out letters to eligible recipients no later than two months before they reach state pension age, telling them what to do.

State pensions can be claimed even if a person keeps working, potentially boosting income during a person’s later years.

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State pension age: Will the DWP increase it again following Ombudsman probe? Full details

State pension age changes were introduced in recent years as previously, the official state retirement age was 60 for women and 65 for men. However, under the Pension Act of 1995, and subsequently the Pension Act of 2011, many women born in the 1950s saw their state pension age rise to match those of men.

“Both the High Court and Court of Appeal have supported the actions of the DWP, under successive governments dating back to 1995, and the Supreme Court recently refused the claimants’ permission to appeal.”

Regardless of the outcome of the review, the Government has plans to change the state pension age again in the coming years.

Currently, the state pension age is 66 for most people but under the Government’s current schedule, it will be rising to 67 between 2026 and 2028.

Beyond this, it will rise to 68 by 2046.

For those unsure of their state pension age, it is possible to check on it through the Government’s website.

The Government’s website has a free-to-use tool, allowing people to check on when they’ll reach state pension age, pension credit qualifying age, and when they’ll qualify for free bus travel.

This tool simply requires the user to input their date of birth.

Once this has been entered, the user will be presented with an exact date from when they’ll be able to claim their state pension.

To be eligible for state pension, a person will need to have at least 10 years of National Insurance contributions under their belt.

At least 35 years will be needed for the full amount of £179.60 per week.

State pensions can be claimed online, over the phone or through the post.

Full details on state pension rules can be found on the Government’s website and impartial guidance can be sought from the likes of Pension Wise or the Money Advice Service.

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State pension: Grandparents urged to check as many could boost sum by £2,340 per year

State Pension payments are relied upon by many retired people to make ends meet in retirement. The sum is overseen by the Department for Work and Pensions (DWP), which is responsible for ensuring everyone receives the amount to which they are entitled. It is no surprise that many state pensioners will want to unlock the full amount from the DWP to support them in retirement.

This could happen, for example, if the parent or primary carer is at work or away from home.

Of course, many grandparents are likely to fall into this bracket, meaning they could be provided with the chance to boost their state pension eventually.

With a parent at work, paying their own National Insurance in most cases, it is unlikely this person will need the credits they could get from Child Benefit.

The process works then as the parent or primary carer is able to sign over the credits to the grandparent or other member of the family who is taking on some of the caring responsibilities. 

An additional benefit is that this can be done at no extra cost, making it a win-win for parents, grandparents and children.

And grandparents may even be able to backdate their claim to when the scheme first started in 2011.

Experts have estimated this could mean a windfall of £2,340 worth of a state pension.

To apply, Britons will need to complete an application form which includes the following details:

  • Personal information of the family member caring for the child
  • Child’s details and the periods of care
  • Personal details of the child’s parent or primary carer
  • Declarations of both the family member and the parent

This form of support is also made available to grandparents who have provided care for children remotely.

Due to the COVID-19 crisis, the Government has acknowledged face-to-face care may not have been possible.

Its website added: “If you have provided care in a different way, for example, over the telephone or video, you can still apply for NI credits for the financial year 2019/20 and 2020/21.”

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