State Retirement Pension and Occupational Pensions
This page provides information on:
- State Retirement Pension, and
- Occupational Pensions.
State Retirement Pension
What is it?
State Retirement Pension is a government-administered pension scheme which is funded through National Insurance contributions (stamp). State Retirement Pension counts as income for other means-tested benefits.
Do I qualify?
You may be eligible for State Retirement Pension if:
- you have reached State Pension age. This is currently 60 for women (but due to increase gradually from April 2010 to 65 by 2020) and 65 for men;
- you (or your husband, wife or civil partner) have enough qualifying years in which your National Insurance contributions (NICs) have been paid
If your National Insurance record accounts for less than 25 per cent of your working life, you are unlikely to be entitled to State Pension. But if you are aged 60 or over, the government's Pension Credit usually means that you will get a guaranteed minimum weekly income.
How much is it?
The full basic State Retirement Pension is £90.70 for a single person and £145.05 for a couple. However, the amount you actually receive may depend on your individual circumstances.
Your State Pension is paid directly into your bank, building society, Post Office® or National Savings account that accepts Direct Payment. If you are registered blind or need someone who cares for you to collect your money you can be sent a cheque to cash at the Post Office®.
How do I apply?
You should automatically get a claim pack sent to you from The Pension Service four months before you reach State Pension age. If you haven't got the pack three months before you reach State Pension age, you can do one of the following:
- call the State Pension claim line on 0845 300 1084, text phone 0845 300 2086 - lines are open 8.00 am to 8.00 pm, Monday to Friday
- download the claim form, print it out, then complete and send it to your pension centre or local social security office
- you can claim online.
You don't have to claim your State Pension as soon as you reach State Pension age. If you defer your claim for at least 12 consecutive months you can either receive additional weekly pension or a lump sum when you do claim.
If you do defer your pension it may be worth getting advice as to whether a lump sum or increase pension would be more beneficial. The increased pension would affect any entitlement you have to pension credit, for example, but the lump sum is not treated as capital and would not affect any means-tested benefits.
For an easy way to find out which benefits might apply to you and your circumstances go to What can I claim?
The Benefits Maximization Service can provide personal advice on what you may be entitled to and help you make a claim. For more information go to Benefits Maximisation Service.
What if I am not satisfied with the decision?
If you are refused benefit or think it should have been paid at a higher rate you can write asking for a revision within one month from the date on the decision. This means that a different Decision Maker will look at your claim again.
It is very important that you reply within one month, as you may not be able to challenge the decision otherwise.
If you are still unsatisfied once the revision has taken place you can ask to have your case heard by an independent appeal tribunal. This usually has to be on a form called GL24, which is available from any DWP office. You can also ask the DWP to post one to you. Again, you must make your appeal within one month of the date of the revision.
What if my circumstances change?
If your circumstances change during the year your entitlement to State Retirement Pension can change. You should inform the Pension Service if:
-
you go into or come out of hospital
-
you go abroad to live or for a long visit
-
you go into a care home.
You can phone The Pension Service Monday to Friday from 8.00 am to 8.00 pm on 0845 60 60 265, text phone 0845 60 60 285.
For an easy way to find out which benefits might apply to you and your circumstances go to What can I claim?
The Benefits Maximisation Service can provide personal advice on what you may be entitled to and help you make a claim. For more information go to Benefits Maximisation Service.
Occupational Pensions
Occupational pension schemes are set up by employers to provide pensions and life assurance benefits for employees, for example, a tax-free lump sum payable if they die before retirement to their dependant(s).
There are to main types of occupational pension scheme:
-
final salary, in which the pension is a proportion of your salary at or near retirement date and is linked to the number of years you have worked for the particular employer; or
-
money purchase, in which the pension is based on the total value on retirement of the money paid into the scheme and on how the investment has performed.
Do I have to join this scheme?
As an employee you have the right to leave, or decline to join, an occupational pension scheme. If you are thinking about leaving an occupational pension scheme, you should consider the implications of this very carefully, because an occupational pension scheme will usually be far more advantageous than a personal pension scheme. In addition, an occupational pension scheme may be reluctant to allow you to return to the scheme after you have left to take out a personal pension. If you decide to leave, or decline to join, an occupational pension scheme, you will then have to contribute towards additional pension or a personal pension.
If you are thinking about leaving a personal pension scheme, you should get independent financial advice first. You can find information on how to get independent financial advice on the pensions page of the Financial Services Authority web site at www.moneymadeclear.fsa.gov.uk.
Disclaimer
Although every effort is made to ensure the information on these pages is accurate and up to date, it should not be treated as a complete and authoritative statement of the law.