State Pension Flashcards
There are three types of additional state pension;
- Graduated State Pension
- SERPS (1978 – 2002)
- S2P (2002 – 2016)
These are ‘top ups’ available to help benefit those on the lower end of the payment spectrum.
These were not available to those who were self employed.
Some schemes automatically opted you out of these top ups during ‘SERPS’
The employer would need to guarantee that you would be no worse off - this would be called a ‘Guaranteed Minimum Pension’
‘Top ups’ available to help benefit those on the lower end of the payment spectrum but not available to those who are self-employed.
Some schemes opted out of these top ups during the SERPS period, what then would the employer need to guarantee?
That you would be no worse off and this would be called a Guaranteed Minimum Pension (GMP).
What is the minimum years stamped required before being able to receive any state pension entitlement?
Minimum 10 years.
What is the maximum years stamped to be able to receive the maximum state pension entitlement.
35 years.
What is the current state pension age?
State pension age is currently 66 regardless of health and between 2026 and 2028 this will change to 67.
Can you delay/stop taking your state pension?
Yes.
You can delay or stop taking a state pension but are only able to do this once during a lifetime - you are entitled to an increase if you defer your pension.
What is a ‘State Pension Forecast’?
A State Pension forecast will show you how much State Pension you could get and the date you can get it – It may also offer recommendations.
What is the ‘Triple Lock’?
The triple lock is intended to protect the incomes of pensioners by ensuring that the state pension increases at a faster rate than inflation alone.
The increase is determined by the highest % of three measures.
Are you entitled to the ‘Triple Lock’ if you reside outside of the UK?
No, but you are still entitled to the state pension but not the ‘Triple Lock’.
What are the three measures that make up the ‘Triple Lock’
- 2.5%
- The average increase in total wages across the UK for May to June of the previous year.
- Inflation in the September of the previous year, using the Consumer Prices Index (CPI).
When does the ‘Triple Lock’ take place?
April each year.
If the average wage increase was 1.5% and the CPI increase was 1.8%, what would the ‘Triple Lock’ be set as?
2.5%
This is due to it being higher than the other two measures.
If the average wage increase was 2.2% and the CPI increase was 2.6%, what would the ‘Triple Lock’ be set as?
2.6%
This is due to it being higher than the other two measures.
Sarah and her friend Olivia both are in receipt of state pensions. Sarah’s pension increases every year, but Olivia’s does not. This may be because:
A. Sarah is aged 67 and Olivia is aged 72.
B. Sarah had a SERPS entitlement but Olivia did not.
C. Olivia had 28 qualifying years of national insurance payments and Sarah had 35.
D. Olivia emigrated to Australia when she retired.
D. Olivia emigrated to Australia when she retired.
