The New State Pension

The New State Pension

The new state pension was introduced on 6th April 2016.  This affects everyone who has yet to reach state pension age.

The old system was too complicated to work out how much you would receive in old age, making it difficult to plan for retirement.  The new State Pension was introduced to simplify the situation.

The full State Pension is based on your National Insurance (NI) contributions only.  You will need 35 years contributions to get the get the full amount which is currently £164.35 per week.

Working out how much you’ll receive is very straightforward if you’re just starting work and haven’t built up any State Pension.

For example, 25 years of NI contributions means a state pension of 25/35ths of the full amount.  However, if you have less than 10 years, you won’t normally qualify for any State Pension.  It’s a good idea to get a forecast to see what you’ve built up so far so you know here you stand. This is available from the government website by clicking here.

The new State Pension increases each year by whichever is the highest:

  • earnings – the average percentage growth in wages

  • prices – the percentage growth in prices in the UK as measured by the Consumer Prices Index

  • 2.5%

You can still get a State Pension if you have other income like a personal pension or a pension from work.

There is no perfect solution to your retirement planning, however, one thing is for certain; for most people this will only provide for a basic lifestyle.

In order to enjoy retirement and not have to work for the rest of your life you will need to make extra provisions.

At TKV we offer a complimentary pension review of your retirement plans, contact us to arrange a meeting.

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How To Choose Your Retirement Age

How to choose your retirement age

Many people are concerned or confused about their pension as they approach retirement age, or possibly they are thinking about retiring and have a few questions. We may be able to help bring clarity to your situation.

Choosing your retirement age will have implications on how much money you will have in your twilight years.

There is no doubting the subject of retirement is complex.  Factors such as the rate you drawdown funds,  annuity purchase or taking all you cash in one go all come into play.  Choosing when to retire may well boil down to a simple question:

Have you acquired enough money to give you the income you want when you retire?

With this in mind it is worth considering an action plan for your retirement.  This will detail your various pension plans, pension funds and your state pension.  Your outgoings can also be put on your action plan.  This provides clarity on how much disposable cash you will have when you retire.  The advantage of an action plan is that it makes your financial situation clearer to see.

Good financial advisers will ask you questions about how you plan to live when you retire.  The more extravagant, the more money you will require to sustain a lifestyle of this kind.  So define your lifestyle and possibly estimate how much you will need to sustain it.

In all instances it is worth seeking independent financial advice.

  For financial advice contact us on 01384 671947 or leave your details and we will contact you.

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A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future.