Qualifying conditions for the Basic State Pension
Currently, to qualify for the full Basic State Pension (BSP), a man
needs 44 qualifying years and a woman needs
39.
For those reaching State Pension Age (SPA) on or
after 6 April 2010, the number of qualifying years needed to
qualify for a full BSP will be reduced to 30 for both men and
women. A person with less than 30 qualifying years will be
entitled to a proportion of the full BSP for each qualifying year
they have built up.
Click here
to read more about the BSP.
Claiming a Category B pension
A Category B pension is paid by virtue of a
spouse's qualifying years and earnings. Currently, on
reaching their SPA, a person cannot claim a Category B pension
until their spouse has claimed their own pension.
This restriction will be removed with effect from 6 April
2010. As a result, where one member of a married couple or
civil partnership has deferred his or her pension and the other
member has reached pension age, the other member will be able to
claim their Category B pension.
Home Responsibilities Protection entitlement
Home
Responsibilities (HRP) will be replaced by a new system of
weekly contribution credits from 6 April 2010 for foster carers,
people caring for one or more severely disabled persons for 20
hours a week or more or getting Child Benefit for a child under 12
years of age.
For those reaching SPA on or after 6 April
2010, each complete year (up to a maximum of 22) of HRP awarded
under the existing rules will be converted into a qualifying year
for the BSP. Converting years of HRP can
also be used for up to half the working life to help satisfy the
condition for bereavement benefits.
Click here to read
more about HRP.
Uprating of the State Pension
Subject to affordability and the fiscal position in 2012, but in
any event at the latest by the end of the next Parliament, the
basic state pension will be uprated annually in line with average
earnings rather than prices.
Eligibility for the State Second Pension
The State Second Pension (S2P)
provides an additional state pension for:
- those with earnings at or above the annual National Insurance
lower earnings limit (£4,940 in 2009/10); and
- qualifying carers and certain long term sick or disabled people
who, for the purposes of calculating the benefit, are deemed to be
earning at the low earnings threshold (£13,900 in
2009/10).
Employees with earnings between the annual lower earnings limit
and the low earnings threshold are treated as having earnings at
the threshold for S2P purposes.
From 6 April 2010 access will be extended to foster parents,
people awarded child benefit for a child under age 12; people
looking after someone with a qualifying disability for at least 20
hours a week. They will be deemed to be earning at the low earnings
threshold, for S2P purposes. Additionally, people will be able to
combine earnings with credits for caring and/or incapacity within a
single tax year in order to build up S2P entitlement.
Restructure of S2P
The rules for the additional State Pension are changing. In the
future it will become a simple, single rate, weekly top-up to the
basic State Pension.
For people earning £4,940 or more a year or getting
credits for State Second Pension, it will start to build up at a
flat rate of around £1.60 a week (both figures in 2009/10
money) for each qualifying year. The exact date from which this
will start has yet to be fixed, but it is expected to be between
2012 and 2015.
The current earnings-related element built up by people earning
between £13,900 and £40,040 a year (in 2009/10) will be
gradually withdrawn, so that people will build up entitlement on a
completely flat-rate basis by around 2030 or shortly afterwards.
These changes to additional State Pension are intended to make it
easier for you to understand how your State Pension is worked out
and estimate how much you will receive.
Increase to the State Pension Age (SPA)
The State Pension Age (SPA) is the earliest age you can draw
your State Pension. Your SPA is specific to your date of
birth.
Historically, the SPA has been 60 for women and 65 for
men. However, these are changing.
- Between 2010 and 2020 women's retirement ages are increasing to
65.
- Between 2024 and 2026, retirement ages for men and women are
increasing to 66.
- Between 2034 and 2036, retirement ages for men and women are
increasing to 67.
- Between 2044 and 2046, retirement ages for men and women are
increasing to 68.
