How do you feel about growing old? Do you agree with the French philosopher Pierre Teilhard de Chardin who said:
“Growing old is like being increasingly punished for a crime you haven’t committed”.
How old is old anyway (especially if as some say sixty is the new forty?) However old you may feel, the state treats you differently when you reach the state pension age. In 1908, when the state pension was introduced the qualifying age was seventy. In 1925 a pension as we know it today, based on contributions from employers and employees first came into being. The pension age was then sixty five. In 1940, it was reduced to sixty for women until 1995 when it was decided that it had to be the same for men and women. As a result, the state pension age for women has been rising since 2010 and will become 65 in November 2018.
In 2007 a law was introduced to increase the state pension age for men and women progressively to sixty eight by 2046. The government has now proposed that
- people born between 6 April 1960 and 5 March 1961 will reach State Pension age between 66 and 67
- People born on or after 6 March 1961 will reach State Pension age when they are 67 or older.
How are you treated differently when you are officially classified as old? Perhaps most importantly (providing you have paid or been credited with National Insurance contributions) you can get the State Pension (which was up to £110.15 per week before 06 April 2014). This increases every year according to:
- the average growth in earnings,
- price inflation or
- 2.5%
whichever is the highest.
If you reach State Pension Age on or after 6 April 2016 you will receive a new Single Tier Pension. This should simplify pension entitlement as it will replace
- the State Second Pension,
- contracting-out
- outdated additions, such as the Category D pension and the Age Addition.
The Savings Credit element of Pension Credit will also close to pensioners who reach State Pension age after the introduction of the single-tier pension.
So, how do you know whether you will receive the exisiting pension or the Single Tier pension?
If you are a man, the State Pension Age on 06 April 2016 will be sixty five. In other words men born on or after 06 April 1951 will be able to claim the Single Tier Pension.
If you are a woman, the situation is complex (because the State Pension Age is changing for women).
A woman born on or before 05 April 1953 will come under the current pension arrangements. A woman born on or after 06 April 1953 will be able to claim the Single Tier Pension after 06 July 2016. The pension paid to women will be based on their own National Insurance contributions.
