7 - The State Pension Flashcards
Can people still claim the old state pension?
Yes
How many years NI to receive full state pension? How many yes to receive the min. state pension?
35yrs
Min. required of 10yrs
How is state pension paid?
Pay as you go basis - People now paying NI are paying for state pension now
NI contributions:
Class 1
Class 2
Class 3
Class 4
Class 1 - employed
Class 2 - self employed
Class 3 - voluntary
Class 4 - self employed
How often is the state pension age reviewed and possible change for everyone in the UK?
Every 6yrs
How do you claim your state pension? And who do you apply to?
Complete a form and send it to DWP. Should receive a letter 4 months prior reminding you to claim this.
2 ways to know state pension entitlement
Go on Gov.uk and check
Or
Complete a BR19 form and a statement will be issued within 10 days
Is state pension income taxable?
Classed as earned income however other income is taxed via:
- adjustment in tax code
- PAYE system
- self assessment
- what if non UK resi. and receive state pension?
If double taxation rule applies - No UK tax and subject to other country tax rules
If no double taxation rule applies - Will pay UK tax and may pay tax in other country also
How is old state pension & single tier pension inflation proofed?
Triple lock system - Will rise by higest of:
- National average earnings index
- CPI
- Fixed rate of 2.5%
What dates does triple lock system check dates run from?
July to July for earnings
September to September for CPI
Then applies to the following April
Can state pension be paid if you live abroad?
Yes, but only receive escalation increases if:
- live in UK min. of 6months a yr
- reside in EEA state or Switzerland
- reside in a country with a DWP agreement
Otherwise will receive base state pension with no triple lock increases
Can you defer state pension payments? And why? (2)
Yes, as can then either:
- receive higher state pension in the future
Or
- take a cash lump sum in the future
How many times can you choose to defer state pension?
Once
Rules for deferring state pension pre 6th April 2016
Higher future income:
- min. deferred period of 5 weeks
- increase in payment of 0.2% per month
- taxed as usual earned income
Lump sum in leiu:
- min. deferred period of 1yr
- lump sum equates +2% interest above BoE base rate
- taxable at lowest tax rate band
Rules for deferring state pension post 6th April 2016
Lump sum in leiu option removed
Higher future income:
- min. deferred period of 9 weeks
- increase in payment of 1%pw for each 9 week period
- taxable as usual earned income
Bereavement support payment (On exam tax tables)
Survivor has children under 20 in full time education:
- £3,500 lump sum
- £350pm for 18 months
Survivor does not have children under 20 in full time education:
- £2,500 lump sum
- £100pm for 18 months
Does Bereavement support payment have an effect on other benefit payments?
No
Must meet what requirements to receive Bereavement support payment? (4)
- paid NI for 25 weeks in any tax yr
- died due to work
- was under SPA
- claimant not in prison
Inherited state earnings related pension (SERPS) limits
100% men born before - 6/10/37
50% men born on or after - 6/10/45
100% women born before - 6/10/42
50% women born on or after - 6/7/50
Inherited state second pension (S2P) limits
Set amount of 50% of entitlement
Pension credit purpose (2) & end date
Ensure min. level of income beyond SPA
Reward individuals who have saved more towards retirement
No longer available for people reaching SPA from 6th April 2016
Is pension credit means tested?
Yes, so more income you have the less pension credit you will receive
Excluded (CCHAD) and partly excluded income for pension credit
Excludes: (CCHAD name Chad)
- disability benefits
- attendance allowance
- housing benefit or residency orders
- child benefits or maintence
- charity payments
Partly excludes:
- £10 of total income from any widow or civil partner pensions
- £20 of each payment from a tenant or sub tenant
- any interest costs or equity release schemes
Included capital for calculating total income to figure out pension credit entitlement
First £10k of capital is disregarded then:
- All cash deposits and investments included minus any mortgages or loans
How is weekly income calculated from capital for pension credits
After first £10k, for every £500 then £1 of weekly income is generated
What is guaranteed income when in pension age?
Guaranteed level of income where if below will receive top-up of guaranteed credit and if above this then will receive nothing
Savings credit
What if we’re a couple?
Is this still available?
How would savings credit reduce if had high amount of savings?
Would receive if fall between guaranteed credit threshold and savings credit threshold then
Only one have to meet requirements if a couple
No longer available
For every £1 over guaranteed credit level a debit of 40p would be applied until savings credit was £0. So will start to reduxe from £6k and be £0 at £16k
How much is state pension per year in 24/25?
£11,466.24
