It’s humanly impossible to keep working for the rest of your life. No matter how fit you are or how much you love your job, there will surely come a time when you wish to spend your time differently. To prepare for such a moment in life, it is essential to start saving up early. If you are above the retirement age or are simply wondering how to get a retirement pension when the time comes, here’s how you can work through your pension application and savings to secure life after retirement in the UK.
- What Is a Pension?
- How The Retirement System Works in the UK
- What Is the Retirement Age in the UK?
- When and How To Apply for a Retirement Pension
- What You Can Expect to Receive
- Processing Time
- Wrap up
What Is a Pension?
A pension is a savings plan that allows you to save for your old age. The pension scheme you choose deducts a certain amount of money from your paycheque and saves it to your pension account, awaiting your retirement. You can access different types of pensions: the Basic State Pension Scheme, the New State Pension, and Additional State Pension Schemes. The pension scheme you choose will determine the benefits you will enjoy once you start receiving your weekly pension payments.
How The Retirement System Works in the UK
Once you hit the retirement age in the UK, you should start receiving State Pension benefits in your bank account, depending on how much you saved during your working years. Men born before 1951 and women born before 1953 can start claiming the basic state pension. Anyone born before these dates only has access to the New State Pension.
What Is the Retirement Age in the UK?
Currently, the retirement age for both males and females is 66 years. However, the UK government has shown interest in increasing the retirement age to 68 years between 2037 – 2039. Previously, it was mandatory for all persons who reached retirement age to stop working. However, the State Pension changes in the law in 2007 no longer require UK citizens to cease working once they hit the pensionable age. This means that you can keep working as long as you’d like even after you retire.
Can You Get Early Retirement?
You can get early retirement if you’d like to take your pension earlier than the recommended time. This is only possible in two legal circumstances; you can withdraw from your pension pot if you are forced to retire due to chronic illness, or you have the right to take this route under your pension contract. You can learn more about applying for early retirement in this article.
When and How To Apply for a Retirement Pension
Two months before you reach your pension age, you will receive an invitation letter prompting you to apply for these funds. You can claim your pension if you do not receive this document and are three months away from reaching your pension age.
You can apply online, send your application by mail, or phone the pension service to claim your pension. The fastest way to submit your claim is by applying online. Follow the instructions and answer the questions correctly to avoid any delays. If you opt to mail your application, you should mail your request to:
Pension Service 8
Post Handling Site B
However, online applications are recommended because they are both fast and efficient, as they allow instant communication in case of inquiries from both ends. Once you apply for a pension, you can’t track the application’s status. You will have to await further communication from the pension service. If there are any delays in the disbursement of funds, you should contact the pension service for help.
The Requirements and Documentation Needed
If you want to apply for a pension and start receiving the weekly pay-outs, you must:
- Be of retirement age, that is at least 69 years if you are a woman and 71 years if you are a man
- Have at least 30 qualifying years of national insurance contributions for the new state pension or 10 for the basic state pension
- Have a National Insurance Number (NIN)
- Provide proof of identity
- Have a marriage certificate or a civil partnership document
- Provide dates of time spent working abroad
- Submit building society or bank information
- Show a state pension invitation letter code
What You Can Expect to Receive
The amount of pension money you receive depends on your national insurance record. Nevertheless, you can only receive a maximum of £185.15 each week. If you had the additional state pension, you have a chance of receiving more than the stated amount, but you must have saved above a particular threshold.
Delaying to apply for your pension puts you in a better place to receive a higher amount than the maximum weekly new state pension.
How You Will Receive your Retirement Pension
If you live in the UK, you will receive the money in your bank account. However, this money is paid in arrears for the past four weeks. Additionally, the payment day you receive the money depends on the last two digits of your NIN:
The basic time it takes to complete a pension request is 5-7 working days. This depends on how smooth the application process is, meaning it could take longer if there were hitches along the way. You will usually receive your first pension money within the first five weeks after reaching the pensionable age. Afterwards, the money will be paid every four weeks. To find out how much you can get paid, use an online pension calculator for accurate calculations.
Pension benefits allow senior citizens to enjoy their latter days without stressing about their basic needs. If you save some funds for your national insurance you can secure your future. Visit www.gov.uk for more details on how to get your pension if you are above the pensionable age.