Getting The Most From The State Pension

The state pension is meant to be a ‘minimum standard’ income for all pensioners in the UK, which means that many of today’s workers are courting danger by relying on it as their sole income. Some experts suggest that too many people are planning to rely on the state pension in retirement because they are unaware of how little income it really provides.

This means it’s important for all Britons to understand that the basic state pension pays just £107.45 per week for a single pensioner, totaling just £5,587.40 a year. An even more worrying thought is that many people, especially those who have taken time out of their careers to raise children or care for a loved one, may not even qualify for that much because they haven’t been able to contribute enough National Insurance. Those who must use their husband’s, wife’s, or civil partner’s National Insurance contributions to qualify for the state pension can get just £64.40 a week.

Pension Credit

There are, however, further supplements to the state pension that can act as a safety net. One example is Pension Credit, which is a top-up to the state pension that could pay up to £137.35 to a single pensioner, or £202.70 to a pensioner with a partner.

Those over the age of 65 may even qualify for an additional £20.52 a week, which rises to £27.09 for those with a partner.

The guarantee credit is saved for pensioners who have little savings of their own, and it tops up the state pension to £142.70 or £217.90 for single or partnered pensioners, respectively. The state also takes into account things such as housing costs and mortgage interest payments, which could qualify you for higher guarantee credit payments.

Savings Credit

There is also a part of pension credit called the savings credit, which is meant to encourage and reward people who have made private provisions for their retirement, such as taking out a personal or workplace pension. This part of the pension credit system can add up to £18.54 a week to a single saver’s state pension income, or £23.73 for someone with a partner.

This is intended for modest savers, however, so in general, anyone single people with income over £190 cannot qualify for the savings credit. The limit is at around £278 for those with a partner. However, there may be exceptions for people who have high housing costs, care for a severely disabled person, or other outstanding circumstances. 

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