State Pension

Question 1

What is the maximum state pension in 24/25?

Answer 1

£221.20 per week

Question 2

What did the old state pension consit of?

Answer 2

Basic state pension
Additional state pension

Question 3

Who could receive the old basic state pension even having not made contributions?

Answer 3

Divorces using former spouses NICs
Widows not entitled to Widows pension or bereavement pension
Disabled

Question 4

When was someone eligible to category B basic pension?

Answer 4

When they had built up less than 60% of the category A pension.

They could then benefit from their spouses NICs and become a dependant their spouse is then the Contributor.

Question 5

What were the 3 additional state pensions shemes

Answer 5

Graduated pension 1961 to 75
State earnings related pension (serps) 1975 to 2002
Second State pension 2002 to 16

Question 6

Who was entitled to an additional top up after 2016

Answer 6

People who had built up £155.65 or more basic pension but not reached pension age.

Question 7

How is the foundation amount calculated?

Answer 7

Number of years NIC at 6 April 2016/35×155.65

Any rebate derived amount would also be deducted.

Question 8

What would someone get if their foundation amout exceded the current single tier pension and the £155.65 per week?

Answer 8

The full single tier pension and an additional entitlement known as protected payment.

Question 9

Who would likely have a higher foundation amount?

Answer 9

Employees not contracted out compared to contracted out and self-employed.
Older people
Higher earners

Question 10

How much is given with the Bereavement support payment

Answer 10

£3,500 plus an ongoing income of £350 for 18 months if on child benefit.

£2,500 plus £100 for 18 months

Paid regardless of age of remarriage.

Tax-free and doesn’t count towards benefit cap.

Question 11

What is widowed parents’ allowance?

Answer 11

Legacy scheme
Pays weekly benefit of £148.40 if the deceased had paid sufficient NIC or died due to their work and the claimant has their children or is carrying thier children.

Not means tested
Ends if cohabiting or remarried.

Question 12

How can serps/s2p be inherited?

Answer 12

For SERPS, Spouse inherits a percentage between 50% to 100% depending on deceased age. Older is higher

S2P and pension bought with NIC 3A 50% is awarded.

Question 13

At what age did the SPA equalise?

Answer 13

65

Question 14

When did the SPA start to increase?

Answer 14

December 2018

Question 15

What date was the SPA increased to 66

Answer 15

October 2020

Question 16

When will SPA increase to 67

Answer 16

Between 2026 and 2028

Question 17

How often is SPA reviewed?

Answer 17

Every 5 years

Question 18

What are class 2 NICs now?

Answer 18

Voluntary contributions for self-employed earning under £6,725

Question 19

How much are class 3 NICs

Answer 19

£17.45 per week for the last 2 years

Question 20

When do self-employed pay class 4 NICs

Answer 20

Over £12,570 profits

Question 21

Who can pay class 3 NICs

Answer 21

People with incomplete single tier pension that are yet to reach SPA

Those who reached SPA before April 2016 to top up thier basic state pension

Question 22

How long do people usually have to pay class 3 NICs

Answer 22

6 years

Extension applied for 5 contribitions for people on the old scheme reaching SPA after april 2016. These apply to 2006/07-2015/16.

Question 23

If you have started taking your state pension, can you deffer it?

Answer 23

Yes, but can only defer once overall.

Question 24

What are the state pension deferral options for those who reached SPA before April 2016?

Answer 24

Increased pension- 0.2%pw to 10.4%pa non compounded
Lump sum of missed payments plus interest taxed in full at highest rate of other income. (Doesn’t push into other bracket)

Question 25

What are the state pension deferral options for those who reached SPA after April 2016?

Answer 25

No lump sum
Increased pension at 5.8%pa or 1% for 9 months of deferral.
Minimum deferral is 9 weeks

Question 26

What happens if death occurs in defferal?

Answer 26

No way to inherit
Can back date payments for 3 months

Question 27

What is savings credit?

Answer 27

A provision made to people who made a modest saving but not too much and reached SPA before April 20216

Started at a level above the pension and then was slowly withdrawn as income and capital increased.

Question 28

What are the rates for pension credit now?

Answer 28

£17.01 for a single person
£19.04 for a couple

Question 29

What is guarantee credit?

Answer 29

Means tested for people who don’t have full single tier.
Subsitence level income in retirement.
Currently £218.15pw
£332pw for a couple

Question 30

How are state pensions taxed overseas

Answer 30

Uk resident- UK tax
Not UK resident but in country with reciprocal tax regimes - tax in other country
Non UK resident no reciprocal tax- UK tax and potentially taxed in country