New State Pension Communicating the changes

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1 New State Pension Communicating the changes Department for Work and Pensions September Department for Work and Pensions

2 Contributory benefits The current state pension system is complex Meanstested benefits Current System Disability and Carer benefits: e.g. Carer s Allowance, Attendance Allowance Housing Benefit & council tax Pension Credit an income related benefit made up of two different parts, Guarantee Credit and Savings Credit. support Savings Credit Guarantee Credit top up to l needs Additional/Graduated Pension (AP) including Grad, SERPS and S2P, amount can vary depending on earnings and the years over which contributions were paid (range of AP from around 160) Inherited AP on bereavement or shared AP on divorce Higher rate for additiona Contracted-out deduction - those in certain occupational pension schemes could contract out of AP. 25p Age addition (80 yrs +) Derived entitlement to BSP - those who do not have full BSP in their own right may get some BSP based on the NI record of their spouse or civil partner. Basic State Pension - full amount is Plus private / workplace pension entitlement where applicable New System Disability and Carer benefits: e.g. Carer s Allowance, Attendance Allowance Housing Benefit & council tax support Pension Credit Guarantee Credit with higher rate for those with additional needs New State Pension - full amount is above the basic level of Guarantee Credit Plus private/ workplace pension saving boosted by automatic enrolment Meanstested benefits 2 Department for Work and Pensions Contributory benefit

3 Who is affected? How people are affected depends on whether they reach State Pension age before or after 6 April From 6 April 2016, there will be 3 groups of people: People reaching SPA before 6 April 2016 will stay on the old system Future workers (those who don t have any National Insurance contributions before 6 th April 2016) - people not yet in the NI system will have a simple new State Pension - full amount if they have 35 years NI contributions (minimum qualifying period 10 years) Current workers (those who have paid National Insurance before 6 th April 2016) - people in the current NI system will get a new State Pension calculated under transitional arrangements 3 Department for Work and Pensions

4 People who reach state pension age on/after 6 th April 2016 Men born on or after 6 April 1951 Women born on or after 6 April 1953 With at least 10 qualifying years of NI record A qualifying year is a tax year during which you are: working and making NI contributions, getting NI credits, e.g. for unemployment, sickness or as a parent or carer, or paying voluntary NI contributions. 4 Department for Work and Pensions

5 Pension Credit Changes to savings credit The Savings Credit part of Pension Credit will close for people reaching State Pension age on or after 6th April This includes those whose partner reached State Pension age before that date but there will be some protection for those couples already getting Savings Credit on 6th April The full new State Pension will be set above the Pension Credit standard minimum guarantee, providing a clear foundation for saving and removing the need for the Savings Credit. The Guarantee Credit part of Pension Credit will continue to provide meanstested support for all pensioners who meet the qualifying conditions. Those reaching State Pension age before 6 April 2016 will retain access to Savings Credit, regardless of when they apply. 5 Department for Work and Pensions

6 Our campaigns The objectives of our communications are simple To encourage and help people to prepare for their retirement depending on their life stage and circumstances. The offer Age 22 Encourage personal saving through workplace pensions Deliver private pension reforms to ensure protection and fairness Build confidence in over 50s at work experience counts Promote pension freedoms and responsibility for your retirement Have a clear and solid foundation through the new State Pension Reassure pensioners that their retirement income is secure Age 70+ Reassure and protect current pensioners 6 Department for Work and Pensions

7 State Pension Online

8 State Pension Online - Benefits Available 24 hours a day, 7 days a week Is safe, secure and simple Takes roughly 20 minutes to complete Customers can save their claim and return to it later to finish off.

9 How do I claim online? 1. Register with Government Gateway Go to and search for claim State Pension online Click start now and follow the simple instructions to register For your security we send two letters containing your user ID and activation code. 2. Once registered you can make your claim online Go to and search for claim State Pension online From your two letters enter the user ID and activation code Enter personal details takes around 20 minutes Once completed we then post you a pension entitlement letter.