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With the state pension age in the UK set to rise from 66 to 67 starting next year, millions approaching retirement are being urged to take action.
Citizens Advice has published a nine-point checklist outlining essential steps to take to help people understand their entitlements and make informed decisions ahead of retirement. The full new state pension currently provides up to £230.25 per week for those who qualify, but eligibility depends on how varying factors, including how many National Insurance years you’ve amassed. Here are the nine checks to make ahead of retirement.
Nine checks to make ahead of retirement
Citizens Advice published the following checklist to help people prepare for retirement. The full guide is available here.
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Work out your expected income and how your spending may change in retirement – Citizen’s Advice’s budgeting tool can help with this.
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Notify benefit providers of your retirement, as your entitlement or the amount may change. Find out more about this here.
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Check if you qualify for new benefits (such as Carer’s Allowance, Housing Benefit, Pension Credit, or Council Tax Reduction).
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Review your mortgage. Find out how much is left to pay and consider financial advice before paying off any remaining balance.
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Get an estimate of your state pension rate. The GOV.UK state pension calculator can help you with this.
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Track down any pension providers that you’ve lost contact with. The Pension Tracing Service can help with this. Call them on 0800 731 0175 or use their online form to find a lost pension.
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Get in touch with all your pension providers and let them know you’re planning for retirement. They’ll usually send you important information about your pension.
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If you have a personal pension, get financial advice or help from Pension Wise so that you know your options for taking it. You might have to pay for financial advice, but it can save you money in the long term.
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Consider what happens to your pension pot when you die – consult your pension provider or an independent financial adviser, as there may be tax implications.
What is the current state pension age?
From October 2020, the state pension age for both men and women rose to 66. There are currently two state pensions available – the basic state pension and the new state pension.
The full basic state pension is currently worth £176.45 per week and is available to:
- Men born before April 6, 1951
- Women born before April 6, 1953.
The full new state pension is currently worth £230.25 per week and is available to:
- Men born on or after April 6, 1951
- Women born on or after April 6, 1953.
To receive any rate of state pension, people must have at least 10 qualifying years on their National Insurance record. The number of qualifying years on this record is used to determine how much state pension a person will receive, but usually, to get the full rate, a person should have at least 35.
When will the state pension age rise next?
According to the Pensions Act 2014, which requires the Government to review the state pension age every six years, the current state pension age for men and women will increase to 67 between 2026 and 2028.
The state pension age is then due to increase again to 68 between the years 2044 and 2046. However, this timetable could soon be changed by the Government.
Recently, Work and Pensions Secretary Liz Kendall announced that the next review of the state pension age will take place earlier than planned, even though the last review concluded in 2023. This upcoming review will assess whether the current pension age of 66 remains suitable, taking into account factors such as life expectancy. There are concerns that people retiring in 2050 may receive £800 less per year than today’s pensioners.
How to check your state pension forecast
People can find out the earliest age they can claim the state pension by using a helpful tool on the Government website.
The tool can help people check a number of key things, such as:
- When they will reach state pension age
- The Pension Credit qualifying age
- When they’ll be eligible for free bus travel
To use the service, people will need to prove their identity using Government Gateway. People can register for Government Gateway if they have not used it before.
