Recent figures from the Department for Work and Pensions (DWP) indicate that the State Pension is a relied upon source of finance for over 12.6 million seniors across the nation, inclusive of over one million Scottish retirees. This financial provision is accessible to people who have reached the United Kingdom Government’s applicable retirement age, which is currently set at 66 for both genders. Furthermore, at least 10 years’ worth of National Insurance Contributions must have been made.
Nonetheless, many individuals nearing official retirement age in the present year might be uninformed that this contributory pension is not automatically provided by the DWP, and hence must be claimed. In the absence of action, they risk losing out on potential weekly payments of up to £203.85.
The State Pension payment is not automatically made as soon as the State Pension Age is reached since some opt to delay the claim with the aim of remaining employed, and consequently augmenting their pension savings, specifically if they lack the full quota of 35 years of National Insurance Contributions, or were ‘contracted out’.
Information from the DWP elucidates: “You do not get your State Pension automatically – you have to claim it. You should get a letter no later than two months before you reach State Pension age, telling you what to do”.
It further clarifies that one can either claim their State Pension or choose to defer (delay) claiming it. If deferred, there’s no need to take any action as your pension will automatically be deferred until you claim it.
Essentially, this means unless you respond to the letter confirming that you want to start claiming State Pension, you will not receive any payments as the DWP will interpret the absence of a response as a wish to defer.
Deferring your State Pension could increase the payments you get each week when you decide to claim it, as long as you defer for at least nine weeks. Your State Pension increases by the equivalent of 1% for every nine weeks you defer, escalating to just under 5.8% for every 52 weeks. It’s important to be aware that any extra payments you get from deferring could be taxed. Find out more on GOV.UK.
State Pension Weekly Payment Rates
In effect from April 8, 2024, here are the updated State Pension payment rates:
Full New State Pension
- Weekly rate: £203.85 (rising to £221.20)
- Forthnightly payment: £815.40
- 2024/25 financial year total: £10,600
Basic State Pension (Category A or B)
- Weekly rate: £156.20 (rising to £169.50)
- Every four weeks: £678.00
- 2024/25 financial year total: £8,814
The rules around the additional payment you can receive vary depending on when you were born and the type of State Pension you receive – either the old Basic or the full New State Pension.
Your First Payment
Your first State Pension payment will be within five weeks of reaching State Pension age with full payments every four weeks thereafter. You can opt to receive your State Pension payments weekly, decreasing the delay for the initial payment.
Your State Pension Payment Day
The day your State Pension is paid depends on your National Insurance number, as follows:
- Last two digits of 00 to 19 – Monday payments
- Last two digits of 20 to 39 – Tuesday payments
- Last two digits of 40 to 59 – Wednesday payments
- Last two digits of 60 to 79 – Thursday payments
- Last two digits of 80 to 99 – Friday payments
Checking Your State Pension
You can receive a State Pension forecast online from the Check your State Pension service. This provides personalised information, including your State Pension age, an estimate of how much State Pension you may get at that point and if you can increase this amount, and lets you view your National Insurance contribution history.
More information about deferring your State Pension can be found here.
Understanding The Starting Amount For The New State Pension
The DWP determines a ‘starting amount’ for the new State Pension if you have qualifying years on your National Insurance record as at April 5, 2016. The amount is the higher of the two below:
- The amount you would have received under the previous State Pension system up to April 6, 2016, or
- The amount you would receive on your record up to April 6, 2016, if the new State Pension had been active at the start of your employment lifespan
Calculating Your Starting Amount
If your ‘starting amount’ is less than the full amount of the new State Pension, every ‘qualifying year’ you add to your National Insurance record after April 5, 2016, will add a certain amount to your starting amount. This lasts until you reach the full amount of the new State Pension or your State Pension age, whichever is earlier.
If your ‘starting amount’ exceeds the full amount of the new State Pension, you will receive this higher amount when you reach State Pension age.
If your ‘starting amount’ is equal to the full new State Pension, you will receive the full new State Pension once you reach the State Pension age.
For more updates on pensions, financial planning, and savings advice, visit Glasgow news.
