Alongside workplace and personal pensions, the State Pension plays an essential role in retirement planning. Based on your National Insurance Contributions (NICs) record, it is paid as a weekly income entitlement once you reach your allocated ‘State Pension Age’. This can be different from the age you want to retire.
What is a state pension?
State Pension is a regular payment from the government based on your National Insurance (NI) contributions and it is intended to ensure that everyone has a foundation for their retirement income to support them in their later years.
You can receive it when you reach the State Pension age. From October 2020, the State Pension age for both men is 65 years and women is gradually rising from 60 to 65 years.
How do I claim it?
You will not automatically receive your pension, you need to claim it. You can claim your State Pension online, by telephone or by post in Northern Ireland. You should receive a letter from the Northern Ireland Pension Centre around four months before you reach the State Pension age telling you what to do next. If you still have not received it with three months to go, contact the Northern Ireland Pension Centre.
You do not have to claim your State Pension straight away. You can postpone your claim which is known as ‘deferring’ and possibly get a higher pension when you do.
There are now two systems:
• The new State Pension would apply to you if you reached (or will reach) State Pension age on or after 6 April 2016.
• The basic State Pension will apply to you if you reached State Pension age before 6 April 2016
The new State Pension
Under the new system, the full weekly amount will be given to people with at least 35 years of National Insurance (NI) contributions or credits. It will be worth £175.20 per week, but you could get more or less than this depending on how many years of NI contributions you have.
Exactly how much will I get?
You must have been credited with NI contributions throughout your working years and have contributed at least 10 years to qualify.
The basic State Pension
The full basic State Pension under the old rules is £134.25 a week for people with at least 30 years of NI contributions.
Exactly how much will I get?
You will receive the full amount (£134.25 per week) if you have made NI contributions for 30 years or more. If you have not, you will get 1/30th of the full amount for each year of your contributions. You can pay voluntary contributions to cover any gaps while you were not working or getting tax credits. Under the old rules, you may be able to ‘top up’ your State Pension based on your spouse or civil partner’s contributions if they are of pension age.
NI Direct is the official government website for Northern Ireland. It has information about the State Pension and other types of pensions and saving for your retirement. Should you require any more help please do not hesitate to contact us at McPartland & Sons for more advice on Northern Ireland pension schemes.