Everyone undertaking retirement planning should be aware of the new changes to the State Pension that have taken effect this tax year. Especially since it’s good news for those who have retired or are nearing retirement age since you can now receive more money from the UK State Pension.
This does not constitute advice and advice should be sought in all instances before acting on it. The Financial Conduct Authority does not regulate tax advice.
Essential for planning
An essential aspect of retirement planning is knowing what to expect from your State pension, including when and how much you will be receiving. In order to receive additional entitlements on top of your basic State Pension, you should consider making contributions to the National Insurance Scheme.
The State Pension provides payments every four weeks to people who have reached the qualifying age and have made sufficient National Insurance contributions. Because inflation has sky-rocketed in recent years, the government announced last November that the State Pension would increase by 10.1%, the Consumer Prices Index’s measure of inflation in September of 2022.
From April 2023, the new payments will be £203.85 a week, an increase from £185.15 for the full, new flat-rate State Pension (for those who reached State Pension age after April 2016) and for those who reached State Pension age before April 2016, the new payment will be £156.20 a week, up from £141.85 for the full, old basic State Pension.
What else is changing?
Besides the increase in the pension amount, it’s also possible that there will be changes made around the State Pension age. The government is considering pushing back the age at which you can qualify to start receiving your pension, to align with life expectancy changes. For those born after 5 April 1960, the State Pension age will rise to 67 by 2028 and 68 by 2046.
Exploring retirement savings options?
As with all aspects of financial planning, the earlier you start planning for retirement, the better off you will be.
Staying informed about changes to the State pension and exploring all avenues for retirement savings will help you achieve financial stability by the time you retire. To discuss your options and to get started on your plan, get in contact with us now.