Types of Penisons

State Pension

What is the State Pension?

In 2017/18, the single person’s basic state pension is £122.30 per week. In the case of married or civil partner couples, each partner is entitled to a full state pension, provided they have made sufficient NICs to qualify for a full pension.

In other cases, one spouse may qualify for a full state pension while their partner does not qualify for any state pension, or qualifies only for a reduced pension due to their NIC record. In such cases, state pensions are calculated as follows.

State Pension
  • • The spouse who qualifies for a full pension will receive the full £122.30 in their own right.

  • • If the other spouse qualifies for a pension in their own right of 60 per cent of the basic state pension or more, they will receive their own entitlement with no additional payments.

  • • If the other spouse has an entitlement below 60 per cent of the state pension, their own entitlement will be topped up to 60 per cent (£73.30) based on their spouse’s NIC record. This gives a married couple in that situation a total pension of £195.60, sometimes called the married couple’s pension. The additional £73.30 is a maximum top-up rather than an additional flat-rate payment, and the couple will receive the greater of their individual entitlements based on their NIC records or £195.60.

  • • The basic state pension is guaranteed to increase every April by the greater of average earnings, inflation (the Consumer Prices Index – CPI) or 2.5 per cent. This combination of measures is referred to as the ‘triple lock’ (GOV.UK, 2014).

However recent estimates of the total shortfall in pension provision – popularly known as the savings gap – have varied between £27bn and £33bn. Statistics show that 90 per cent of people now live to the age at which they receive their state pension, compared with 66 per cent of people only 50 years ago – and those who do collect their pension receive it on average for eight years longer than did pensioners in the early 1950s.

To determine if you will have sufficient savings into retirement it is recommended that you seek professional advice to see how you can improve your financial security into retirement.

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