The state pension
Until quite recently, if you were to say the word 'pension' most people would probably assume you were talking about the pension provided by the state. And even now, with personal pension plans playing a much bigger part in many people's retirement planning, it's still important to consider how much you'll receive from the state pension and any other benefits which you may be entitled to
How much could you get from the state pension?
In April 2016, the government introduces a new state pension. While the final rate is yet to be set, in our opinion it is unlikely to be much higher than the minimum level they have set of £148.40 a week
That's £7,738.00 a year.
Could you get by on this amount if you don't have a pension of your own, or any other ways to boost your income?
Putting the state pension into perspective…
According to the Office of National Statistics, the current average UK wage is
The Money Advice Service recommends using between half and two thirds of your salary as a useful rule of thumb when planning for your retirement needs. Half the UK average wage is
The state pension from April 2016 will be
So the difference between the state pension and just half the UK average wage is still
Use My Retirement Planner to assess the estimated future value of your pension income you may receive in retirement
How does the state pension work?
State pension is a benefit based on your national insurance contributions. You can start claiming it once you reach state pension age. This used to be 60 for women and 65 for men, but it's changing for most people and now depends on the year you were born. It’s possible that you’ll start receiving money from any other pensions you may have at a different age.
You can find out more about the State Pension by visiting the UK Government page about State Pension
What other benefits might I receive?
If your income is below a certain level you might be eligible for a top-up to your state pension - but it still won’t rise to more than the £148.40 a week we mentioned earlier.
Council tax reduction
If you're eligible, you could get up to 100% reduction on your council tax bill. To find out how much you might receive, ask your local council at the UK Government local councils page.
If you pay rent, you could get housing benefit. This depends on the level of your income and savings. To find out whether you qualify, visit the UK Government page about housing-benefit.
Personal independence payment
You may be able to claim for money to help with extra costs caused by a disability. Find out more at the UK Government page about Disability Living Allowance.
Free NHS healthcare
If you're over 60, you should get free prescriptions, eye tests and chiropody on the NHS. And if you receive pension credit, you could also get free NHS dental treatment. When you reach 65, you'll get a free flu jab every year, too.
Winter fuel payment and cold weather payment
Free TV license
When you reach 75, you can get your TV licence for free.
Get full details and apply online at the TV Licence website.
Free bus pass
When you reach the state pension age, you can get free off-peak travel on local buses, anywhere in England. Enter your postcode on the UK Government free bus pass page to find out how to claim your free bus pass.
Senior rail card
A senior rail card will cost you £30 for one year or £70 for three years. With it, you'll save a third of the cost of rail journeys throughout Britain. Buy one online at the senior railcard site or ask at the train station.