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In this video I go over probably the least exciting area of finance. The State Pension! Can I make it exciting? Probably not but we all love a trier.
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I am a Chartered Financial Planner providing financial planning services in the UK. I help people retire earlier, make the most of their finances, protect their family and save taxes. If you would like to find out more about working with me, please follow this link:
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7 CRITICAL PENSION MISTAKES – AVOID THESE TO RETIRE EARLY
PROPERTY OR PENSION? A CHOICE AS SAFE AS HOUSES?
TIMECODES
0:00 – State Pension Explained
0:21 – What is the State Pension?
1:21 – How much is the State Pension?
1:41 – When do I get it?
2:32 – How does it work?
3:22 – How much do you need to earn to meet the contribution threshold?
4:21 – The different systems
4:46 – What you can do
6:16 – Tax and Deferring Options
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REFERENCES
CHECK YOUR STATE PENSION
WHEN DO YOU GET YOUR STATE PENSION
CONTRACTING OUT – A BACKGROUND
PLEASE BE AWARE IF YOU PLAN TO RETIRE ABROAD
NATIONAL INSURANCE CREDITS – ELIGIBILITY
SOME GOOD NON-GOVERNMENT SOURCES OF INFORMATION
CONTRACTING OUT – IN MORE DEPTH
Booklet from Royal London on contracting out (booklet is 2018/19)
*Bit of a weird edit cut on the personal allowance which cut off me saying £12,570 and don’t even get me started on ‘unnecessary’.
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Investment involves risks. The investment return and principal value of an investment may fluctuate so that an investor’s portfolio, when redeemed, may be worth more or less than its original value. Past performance is no guarantee of future results. The information provided in this presentation has been compiled from sources believed to be reliable and current, but accuracy should be placed in the context of the underlying assumptions.
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When people think of retiring, they often think of living the rest of their life without worrying about work or financial concerns. But worry about finances can sneak up on them if they neglect to think about the state pension. To help you navigate the complicated world of pension plans in the United Kingdom, we have broken down the State Pension scheme.
What is the State Pension?
The State Pension is a retirement fund that is provided to UK citizens by the government when they reach retirement age. Although this is a government program, not everyone can get this type of pension. It is only given to people who meet certain criteria, which includes years of employment and national insurance contributions.
How do I become eligible for the State Pension?
To become eligible to receive the State Pension, you must have reached pension age, which is currently 66, and must have made the necessary National Insurance contributions. One should have a minimum of ten qualifying years so that they can receive at least a small pension, while they must contribute at least 35 years to earn the maximum pension.
If you take a career break to care for someone or raise your family, you may still be able to make National Insurance contributions to maintain your eligibility for the State Pension.
How much money will I get?
The amount of money one can get from the State Pension depends on the number of years of National Insurance contributions, and when you reached pension age. The current maximum pension per week is £179.60, though not everyone will necessarily receive this amount. The amount will change with the government’s decision to introduce Triple Lock Guarantee, which will increase the amount by the maximum of 2.5%, inflation, or average earnings.
It is important to remember that the State Pension should not be relied upon as the sole source of income in retirement. People are highly suggested to make other investments or take part in employer schemes.
When can I start receiving my State Pension?
The pension age is 66 for individuals born between 6 October 1954 and 5 April 1960. The government aims to gradually increase the State Pension age for future generations, so it is essential to keep up-to-date with the current pension age.
In conclusion, State Pension is an essential part of retiring for UK citizens, and taking the necessary steps to ensure your eligibility for it can help greatly in maintaining financial stability. By contributing to your National Insurance and with a little bit of planning, you can ensure a comfortable retirement for years to come.
Awesome content.
I have finally gained access to my pension account and can now review its details. I wanted to seek your advice regarding whether I should pay for all the shortfalls or just a few specific years that I have missed. I have attempted to contact the future pension center for guidance, but unfortunately, it has been difficult to reach them and obtain any advice. Therefore, I am reaching out to you in search of expert advice.
So far I've got 4 years of full contributions, 11 years I did not contribute enough, so I've got 28 years to contribute before 5 April 2051
Should I make up the payment shortfalls in full or are there other considerations to take into account?
I greatly appreciate any guidance you can provide on this matter. Thank you for your assistance.
Very useful video, thank you!
For anyone young it’s completely pointless. Better to buy good assets that pay you a decent dividend.
Brilliantly clear! Thank you so much.
Awesome! That was super helpful, thank you!
I’ve worked as an immigrant in the UK since 2002 and have accumulated over 12 years NI contributions through work. I am now 40, self-employed, have an LLC, and moved to Greece to live here just before Brexit. I’m still paying UK taxes from my business and making NI contributions.
As a UK citizen, I’d assume I’ll still be eligible for state pension when I get to retirement age. Right? Or will I get a shock in the future that I won’t because I left the country?
That is the best description of our pension I have heard yet , thank you
This goverment have got there priorities wrong big style 45 years of national insurance I've paid and this greedy government keep making it more difficult for the pension age to happen however they fork out over 6 million pounds a day to illegal MIGRANTS that haven't paid a penny tax its disgraceful DOWN with the TORIES
Your better off keeping your own savings…
Still cross that I am forced to retire at 65, but won’t get my State pension until 67.
Best thing to do is not work get all the benefits you can that well pay more then minimum wage get a x box sit at the home the council gave you at a low rent play games all day ,go down the pub get pissed it’s alright no work to worry about the next day so you can sleep it of .save some money by going to the food bank (more money for some weed or beer)have 4or5kids more free money do this till you retire and still get a full pension.makes you wonder why anyone works in the first place I worked all my life got my pension two years ago but still got to work to make ends meet and I don’t get any benefits pay private rent
isn't our state pension the lowest in the western world, with the odd exception…
Every women born in the 1950s had 6 years pension stolen. The great pension robbery!
How come my question not only ignored was removed?
I was also born in 1948, We are always being ripped off by the government every which way. If they stopped giving money to overseas countries we may have more for ourselves.
Hi, could I buy your advice and time for looking into something for me? I lived and worked in the UK between 1992 and 2007, paid into pension plan(s) via employers. Since then I have lived in 4 other countries. So when I get older there's job coming where I must piece together fragments of private and state pension from this journey as employee and contributing tax payer. For the UK part, I could do with some assistance.
Hello great video. My Polish partner worked for 15 years in the UK but has since moved back to Poland to look after her mum. Will she be eligible for a UK state pension when she reaches 67?
SO useful! I'm only 30 and have been trying to figure out what happens if I have fewer NI contributions, I'm not planning to return to work anytime soon, I'm a housewife, and have around 4-5 years of NI, would I get a state pension if below 10 years?
We have and are being RIPPED off…one of the lowest pensions in Europe and one of the highest ages to retire. the UK has always been a MEAN nasty cold little country..better off being an illegal immigrant in the UK , at least they can have in there 4 star hotels heating on 24/7 and 3 hot meals a day the OAPs in the UK cannot have or afford that..awful country for law abiding older people, we have all been HAD.
Can i still get it if i emigrate
I have a two years gap when I was claiming Universal Credit.
The NI contribution was not updated by the DWP.
Why do I get £183,31 pw for my state pension when the full state pension is £179.60? Baffled.
Strange things about pensions is people that don't need the money get massive pensions and ordinary people get peanuts to live on into their old age totally unfair
I've got 40 years NI contribution. The new system means that When I reach retirement age my state pension forecast is £155/ week. I was never told about being contracted out. My frustration is that if I'd been a lazy so and so not worked a day in my life. I'd get a full pension. Yet another way the government rewards people for not working. Oh bye the way my comments are not aimed at people who are unable to work due to a medical issue.