State Pension payments are of particular importance when a person decides to depart from the workforce for a new life in retirement. The sum often make a substantial proportion of a person’s income in later life, and understanding how much one is set to receive is vital for budgeting and goal setting. Under current rules, the state pension increases every year, providing reassurance for those who have retired.
People living in the EU, EEA or Switzerland can also count “relevant social security contributions” which are made in EU countries to help meet the qualifying conditions for a UK state pension.
Usually, the state pension sum is based on the amount of National Insurance contributions a person makes throughout their working lifetime.
Britons usually need at least 10 qualifying years on their record to receive any state pension at all, although these do not have to be qualifying years in a row.
People who are living in countries which aren’t covered by agreements will therefore forfeit a pension increase until they return to the UK.
As a result of this increase, pensioners who are on the full new state pension will receive an extra £4.40 per week.
This will take the new state pension sum for the 2021/22 tax year to £179.60 weekly.
The full basic state pension, the older scheme which many pensioners claim under, will also undergo an increase of £3.40 per week.
This means the sum will increase from its current rate of £134.25 per week, to £137.65 weekly.
However, the government website states: “You may get less than the new full state pension if you were contracted out before April 6, 2016.”
For this reason, many may wish to use the state pension forecast tool available on the government’s website, to determine when they are set to receive their sum, and how much.