State pension changes from 6 April 2016

Understanding the Latest State Pension Changes

The state pension changes introduced from 6 April 2016 mark a significant shift in how pensions are calculated and accessed. The new flat rate state pension scheme aims to simplify the process. However, it comes with new rules that could affect your retirement plans. From changes to the number of qualifying years required to adjustments in the state pension age, it’s essential to understand how these updates impact you. So below, we’ve outlined the key points you need to know to ensure you’re prepared for these changes.

Key Points to Note About the State Pension Changes

The new flat rate state pensions scheme is introduced from 6th April.

Individuals will need a minimum of 10 qualifying years to receive any of the state pension. Please note that under the existing rules you only need 1 year.

The full flat rate pension will only be given to individuals with 35 qualifying years. Currently only 30 qualifying years are required.

The state pension age at 6 April 2016 will be 63 for women. It will be 65 for men. But these ages are due to rise in later years.

If you think your national insurance record is deficient you can request a pension forecast either on-line or by telephone.

You can then decide whether you need to pay sufficient director’s salary from your company to increase the number of qualifying years, pay class 2 contributions for years where you previously claimed exception or if you are going to reach state pension age before 6 April 2016, consider paying class 3A contribution.  This option will be available from 12 October 2015 to 5 April 2017 and a maximum of 25 units can be bought.  One unit buys £1 extra state pension per week and the cost per unit will depend on the age of the applicant.