We explain the rule changes to the state pension age that will see people work longer. Find out when you will be allowed to retire (scroll down for the latest exact dates)…
Happy retirement: But how long will you have to wait for your state pension?
What is happening to the state pension?
The state pension age is rising. And it’s happening at breakneck speed.
For donkey’s years, the age at which you can claim your state pension benefits has been 65 for men and 60 for women.
But huge jumps in life expectancy have seen costs shoot up for the Treasury, which is paying some pensioners for more years in retirement than they spent paying National Insurance as workers.
The age at which women qualify for the state pension is in the process of rising from 60 to 65 by November 2018, with the exact date depending on the month you were born.
Between October 2018 and October 2020, both men and women’s state pension age will increase to 66. And between 2026 and 2028, it will rise again to 67.
The next rise will happen between 2037 and 2039, after the Government accepted the recommendation of ex-Confederation of British Industry boss John Cridland, who carried out an official review of future state pension age increases.
The changes to the state pension age are aimed at bringing women’s state pension age into line with men’s, and taking account of everyone living longer.
When can you get the state pension?
The exact date that you get your state pension will depend on the year you were born. You can work this out using the state pension calculator or referring to the Department for Work and Pensions tables below.
Changes: Women will see the state pension age move to 65 by 2018
Increases: By 2020 the state pension age will be 66 for both men and women
Rises: Both men and women will see the state pension age rise to 67 towards the end of the next decade
Why is there controversy over women’s state pension age increases?
Many women born in the 1950s face financial hardship while they wait longer than they expected to draw the state pension.
A version of the plans to equalise men and women’s state pension age was outlined in 1995, when the then Conservative Government stated the intention of gradually raising women’s retirement age to 65 between 2010 and 2020.
This was followed in 2007 by a Labour announcement that both men and women would see their retirement age go up to 66 between 2024 and and 2026.
But in 2011, Chancellor George Osborne brought forward the timing of both changes to 2018 and 2020 respectively, hitting women particularly hard because their increases are happening both sooner than expected and in quick succession.
Initially, the overhaul included a cap of a maximum two years’ extra wait for a state pension, but protests led to the cap being reduced to 18 months.
Some 2.6million women got just five years’ notice of an extension to their pension age, and 416,000 will be living on annual incomes of less than £8,000 while they wait, according to one report.
Of these, 80,000 women will lose up to £8,000 because of the changes, with 48,000 losing as much as £12,000, according to House of Commons Library figures.
The Women Against State Pension Inequality or WASPI campaign says it agrees with equalising women’s and men’s pension ages, but not the ‘unfair’ way the changes are being implemented. It is fighting for measures to cushion the financial blow.
Who can get a state pension?
Not everyone is entitled to the full state pension, which is a regular payment from the government until you die. Eligibility depends on meeting certain criteria.
As well as being the required age, you must have made National Insurance contributions during your working like, or have paid voluntary National Insurance or be credited with them by the government.
Until April this year, workers needed to have 30 years of qualifying National Insurance contributions to get the full basic state pension, but everyone retiring after this will need 35 years of contributions to get the new flat rate state pension.
However, even if you paid in full for a whole 35 years, if you contracted out for some years on top of that it might still reduce what you get.
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How much is the state pension?
The basic state pension is currently £122.30. It is topped up by additional state pension entitlements – S2P and Serps – accrued during working years.
That two-tier system has changed for people retiring since 6 April 2016, when it was replaced by a new ‘flat rate’ state pension. This is £159.55 a week at present.
However, people who have contracted out of S2P and Serps over the years will get less than this.
If you postpone, then you have a choice when you do eventually take your state pension.
You can either receive extra state pension for the rest of your life, or a one-off, taxable lump-sum payment, equivalent to the benefits you put off claiming plus interest, as well as your regular weekly state pension.
Also, you can stop claiming the state pension after doing so for a period. And if you carry on working after state pension age, you don’t have to carry on paying National Insurance contributions.
The state pension currently increases every year according to the Triple Lock, which means whichever is the highest of earnings growth, the inflation rate or 2.5 per cent.
The present Tory government planned to scrap the Triple Lock in 2020, but it U-turned after the June election under a deal struck with the Democratic Unionist Party and the guarantee seems to be safe for now.