The State Pension is offered to Britons by the government once they reach an eligible age, with those who have made significant National Insurance (NI) contributions standing to benefit the most. Pensioners are given a sum of money each week to provide assistance with living costs and support people in their years after work. The traditional age for retirement usually stood at 60 or 65, however, in recent years, the government announced their plans to raise this age.
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And there is a particular age change taking place today that pensioners and those approaching retirement age should look out for.
On May 6, 2020, anyone who was born between July 6, 1954 and August 5, 1954 will reach State Pension age.
However, this age has automatically risen to 66 in accordance with the government’s wishes.
As a result, those born between these dates are imminently affected by the announcement, and will see their State Pension age as slightly further off.
Changes implemented by the government are a result of the increase in life expectancy – which sees more Britons than ever before spending a longer period of time in retirement.
The government’s proposals are due to take place in increments, with a new set of potential retirees being affected in the future.
Ultimately, the government plans to raise the State Pension age to 68 – and stated it would do so between 2037 and 2039.
From 2017 calculations, the government states a 65-year-old can now expect to spend 22.8 years on average in receipt of State Pension.
This is compared to 13.5 years when the State Pension was first introduced in 1948.
The government is committed to protecting those who have offered years of service in work, and have enshrined this commitment in law.
Under the Triple Lock Mechanism, first introduced by the coalition government in 2010, the State Pension rises by a particular amount each year.
This is by whichever is the highest: the rate of inflation, 2.5 percent, or average earnings for that year.
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In the 2020/21 tax year, which commenced in early April, pensioners witnessed an increase of 3.9 percent in line with average earnings.
Dependent upon circumstances, and indeed years of eligible work, pensioners are entitled to different amounts of the State Pension.
At a maximum, pensioners can expect to receive £134.25 per week if they retired before April 6, 2016.
If retiring after this date, pensioners are entitled to the New State Pension which can offer a maximum of £175.35 per week.
The government provides a tool enabling Britons to check their State Pension online at any time.
This tool provides information on how much a person could receive, and when they will reach State Pension age under the law as it currently stands.
The service also provides future pensioners with advice on how they may be able to increase their pension.
This can be done either through delaying a claim, thereby allowing the pension amount to grow, or through speaking to a financial adviser about personal circumstances.
Additional support is provided to Britons who are struggling financially.
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