The single-tier pension – does it affect you?
The UK government released the long awaited White Paper ‘The single-tier pension – a simple foundation for saving’ on 14 January 2013. It sets out proposals to simplify the UK state pension system. A draft bill will be published in the days following.
The document is 107 pages long – key highlights follow for those who expect to reach state pension age on or after 6 April 2017. The proposals will NOT affect those already receiving their state pension, or those who expect to reach state pension age before 6 April 2017.
To receive the full weekly rate of the single-tier pension, an individual will need 35 qualifying years of National Insurance (NI) contributions or credits. A pro-rata pension will be paid where the minimum qualifying period is met: 7-10 years of contributions, increasing during the transition period.
The full rate of pension is expected to be about £144 per week in today’s terms (2012/2013), which puts it just above the current full pension of £107.45, plus full pension credit of £35.25, for a total of £142.70. (The pension credit is not payable abroad, so the full basic pension of £107.45 is the maximum for pensioners reaching pension age outside the UK in 2013.)
The single-tier pension will be based solely on an individual’s own NI records – it will not be possible to derive, or inherit, a single-tier pension from a spouse or civil partner. However, transitional rules will apply to recognize NI records under the current system, providing a derived (Category B) pension for some.
Pension ages are already being raised to reach 66 by 2020 for men and women. It is proposed to increase the pension age further to 67, to be phased in between 2026 and 2028.
The single-tier pension will NOT be uprated for those pensioners living in countries with which the UK does not have an appropriate bilateral agreement. Pensions in Canada will remain frozen.
Bernard Jackson, BC President,Canadian Alliance of British Pensioners.
This non-profit organization exists to gain pension parity for all UK pensioners world-wide. Join us in the fight to “unfreeze” pensions. Only $20 per family in Canada. Contact us NOW!
www.ukpensions.ca firstname.lastname@example.org Phone: 604-683-3445 or toll free 1-800-760-6633