New State Pension

The full New State Pension will pay £155.65 per week which is above the basic level of means-tested support currently available through Pension Credit.

The new pension is designed to be much simpler and will consist of a ‘single-tier flat rate’ amount without the additions and complexities of the current system - and without the right to inherit or get rights to a pension on the basis of your spouse or civil partner's contributions (except in limited circumstances /some transitional cases). 

People receiving the New State Pension will not qualify for Savings Pension Credit which is abolished under the new state pension system. People who reached state pension age before 6 April 2016 will get the State Pension under the current scheme and will be able to qualify for Savings Pension Credit.

However, for couples the Savings Credit will not be available where one member of the couple reaches pension age before 6 April and the other on or after this date, unless one of the couple was already getting Savings Credit immediately before 6 April 2016 and has been entitled to it at all times since 6 April 2016.

How do you qualify for the New State Pension?

To qualify for the full New State Pension, you will need 35 qualifying years of National Insurance contributions (NICs) or credits.

If you don't qualify for the full pension you can get a smaller amount based on how many qualifying years you have.

You will usually need ten qualifying years to get any new state pension.

You have to make a claim for the new pension which can be done on the telephone, online or by downloading a claim form from the GOV.UK site and sending it to the Pension Service.

It is also possible to defer the new state pension and when you do claim it you may get extra state pension paid with your State Pension - the extra amount may be taxable. Advice should be sought before deferring.

Impact of the new State Pension 

The government has reported that in the first year of the arrival of the New State Pension the majority of people will actually receive the same level of state pension income as they would have done under the current system. 

However, between 2017 and 2030 the government expects three-quarters of people to have a notionally higher income as a result of the New State Pension. This proportion then begins to gradually diminish over time falling to around two-thirds by 2040 and just over half by 2050.   

New State Pension and benefit entitlements

The amount of New State Pension that a person will be entitled to will be dependent upon their National Insurance contribution (NIC) record. Some people will have a low record or may not meet the minimum 10-year qualifying period of NIC required for the new pension. There will therefore be many people who will not be entitled to the full rate of the pension or in some cases none at all.

If you do not qualify for the New State Pension or only for a reduced rate, you may qualify for some Pension Credit to ensure you have a set level of income that the government has set as a minimum living standard. Even if you are getting the full amount of the new pension, in some cases other circumstances could allow you to still qualify for some Pension Credit or other benefits, so it’s always worth completing a benefits check to ensure you do not lose out.

What help is available if you are struggling on low income in pension years?

If you are on a low income, you can apply for Pension Credit. If you receive the Guarantee Credit, you will qualify for support with your housing costs (Housing Benefit if you rent your accommodation or Mortgage Interest Support if you are a homeowner) and Council Tax Support.  You can also make a separate claim for housing costs help and Council Tax Support if you are not entitled to Pension Credit.

You don’t have to stop working when you reach State Pension age. However, if you are working and are on a low income, you may also qualify for Working Tax Credit. If you have an illness or disability, you may qualify for Personal Independence Payment or Attendance Allowance.

Help from Turn2us 

You can use the free Turn2us Benefits Calculator to check your benefits entitlements. Even if you have checked your entitlements in the past, it is worth checking again, especially if there has been a change in your circumstances.

You can also check if you are eligible for a charitable grant or other support by using the Turn2us Grants Search. You can get further details on all the upcoming benefit changes with our Benefit Changes Timetable for 2016.

If you are worried about any of the benefit changes and would like further advice, you can use the Find an Adviser tool to locate face-to-face advice in your local area. You can also obtain information about the new State Pension from The Pension Advisory Service.