Pension

Pension is a kind of regular payment which is paid to the person after his retirement from a fund to which the employee or the employer has provided when they were working. In United Kingdom or UK the pension falls into three major divisions and seven sub divisions.

  • State pensions
  • Occupational Pension and
  • Individual or personal pensions.

From the year 2012 to it is added the automatic enrolment, personal accounts and the minimum contribution from the employer.

The state pension is provided by the government so that poverty can be avoided at an old age. However, till 2010 the men aged 65 and above and women above 60 were eligible to claim state pension plan. In April 2010 the age was made at par with men for women as well to claim for state pension. It is estimated that by 2046 or sooner than that the retirement age will increase to 68.

State Pension: The state pension age for men and women by the year 2018 will be 65 and the pension amount will be GBP 107.45 per week in the year 2012/13 Tax year and from April 2013 it will be GBP 110.15/ per week till April 2017. So if you are going to attain retirement age before April 2017, you can claim this basic state pension.

For married couples and civil partners the basic state pension is:

  • GBP 171.85/week for tax year 2012/13
  • GBP 176015/week from April 2013 to 2017
  • Only one of them qualifies for this state pension plan.

How much amount of this basic pension you get depends upon the number of years that you have spent contributing to the national insurance. In UK it requires contribution for at least 30 years by working, making contribution voluntarily or crediting while caring for the family as well.

The basic state pension increases every year in the month of April and is based on certain criteria:

  • In Great Britain what was the average growth in the wages of the people
  • In the previous September the inflation rate noted by the CPI and
  • 2.5%

By the year 2017 people will be eligible for a basic state payment of GBP 144 in today’s value of money. Some people may be lucky to get more than this if they are entitled for additional state pensions but the qualification age for the same for full payment will be 35 years of contribution to national insurance.