Upon reaching the state retirement age, the majority of people in the UK will be entitled to receive a state pension.

As well as the state pension there are many other benefits to which you may be entitled, depending upon your circumstances. The purpose of this chapter is to make you aware of these benefits so that you can ensure you receive everything that is due to you.

All state pensions and other benefits are dealt with by the Benefit Agency whose head office is in Newcastle upon Tyne and branches throughout the country. It is in each individual‘s interest to make sure that they are receiving everything that is due to them. Whilst this chapter attempts to provide as much general information as possible, if you require further details, apply to the Benefit Agency for booklet NP46.

If you have a company or personal pension, it is your responsibility to make sure that you receive all that you are entitled to from it. In addition there are numerous other concessions designed to save you money.

1 STATE RETIREMENT PENSION

Upon reaching pension age, the majority of citizens in the country will be entitled to receive a state pension. Currently the pension age is 65 for men and 60 for women. However, the Pensions Act 1995 will change the women‘s pension age to 65 by 2020.

How much will I get?

The amount of the pension is determined by the government. The actual amount that you will receive depends upon the number of years you have paid Nl contributions, these are known as qualifying years. To receive the full 100% pension you must have qualifying years of 90% of your working life. Thus if your working life is 41 years or more, you need 36 qualifying years. If you have worked for say 35 years, but only have 20 qualifying years, you will receive 65% of the basic pension.

For calculation purposes, working life is said to commence at 18. If you spent time doing National Service, although you would not have made any Nl contributions you will be credited with those years. Unfortunately this is not the case for time spent at university or in other higher education. Four months before reaching the state retirement age you will be sent form BR1 which will detail what is due to you. You can request a pension forecast at any time before you retire by applying for and completing form BR19.

It may be possible for you to pay Class 3 contributions for previous years to enable you to either qualify for a basic pension at the minimum rate or to increase the rate for which you have qualified. In this case, contact your local Social Security office.

Payment

There are two ways in which you can receive your pension:

• By direct payment into a bank, giro or building society cheque account. By this method you can choose to be paid every four or 13 weeks, however these payments are made in arrears.
• Weekly in cash at the post office in which case you will be issued with an order book. If for whatever reason an order is not cashed within three months, tell your local Social Security office without delay. If it is not cashed within 12 months you will lose the pension due unless you still have the order and can show a good cause for not having cashed it.

Going abroad

If you are going abroad for more than three months, advise your Social Security office in plenty of time so that they can make arrangements to get your pension paid to you abroad. Of course this does not apply if your pension is paid directly into an account.

If you are living abroad, you may only get any rate increases if:

• you are living in a European Community country including Gibraltar, or
• you are living in a country with which the UK has a reciprocal agreement which allows you to receive the increased rate.

2 INCREASING YOUR STATE PENSION

If you are in receipt of a company or private pension or other regular source of income, you may decide to give up your rights to the state pension in order to earn extra. The extra pension you earn is called increments. To get these increments you must:

• be either a woman under 65 or a man under 70
• usually live in Great Britain.

You can only apply to give up your pension once and will only earn increments after seven full weeks.

How much extra will I get?

For each year you give up your right to pension, the most extra you can earn is about 7.5p a week for every £1 of your pension. It is calculated by multiplying your weekly pension by 52 and dividing by 700. Thus a basic pension of £61.15 will earn an extra £4.54, entitling you to receive £65.69 when you resume receiving your pension.

Form N192 from the Social Security office will provide you with additional information and an application form.