Latest news with #NewStatePension
Daily Record
2 days ago
- Business
- Daily Record
Nearly 9 million people of State Pension age will pay tax on retirement income this year
The Personal Allowance will be frozen at £12,570 until April 2028. The latest figures from the Department for Work and Pensions (DWP) show there are now 13 million people of State Pension age across the country. The current official age of retirement is 66 and set to rise to 67 between 2027 and 2028. The UK Government has confirmed that an estimated 8.51 million people of State Pension age paid income tax in the 2024/25 financial year and as the Personal Allowance will remain frozen at £12,570 until the start of the 2027/28 tax year, more pensioners are set to pay tax on their retirement income. The UK Government has also confirmed it will honour the Triple Lock policy during this parliamentary term. However, this could see everyone on the full, New State Pension pushed over the tax threshold in just two years' time. Under the Triple Lock policy, the New and Basic State Pensions increase each year in-line with whichever is the highest between the average annual earnings growth from May to July, CPI in the year to September, or 2.5 per cent. It is aimed at preventing the value of the State Pensions being whittled away by cost of living pressures. The New and Basic State Pensions increased by 4.1 per cent in April, however, future forecasts from the Labour Government expect it to rise by 2.5 per cent over the next four financial years. Using these calculations, it puts the full New State Pension on track to be worth £12,578.80 in the 2027/28 financial year - £78.80 over the Personal Allowance. While the amount of State Pension to be taxed may seem relatively small - tax is only paid on the amount over the Personal Allowance - older people with other income streams could find themselves having to part with more cash to pay a tax bill - if it's not automatically deducted from private or workplace pensions through PAYE. Online guidance at on who might need to pay tax on their pension also includes a handy tool to calculate how much tax someone might need to pay, and the different ways this can be done. The latest State Pension Triple Lock predictions show the following projected annual increases: 2025/26 - 4.1%, the forecast was 4% 2026/27 - 2.5% 2027/28 - 2.5% 2028/29 - 2.5% 2029/30 - 2.5% State Pension payments 2025/26 Full New State Pension Weekly payment: £230.25 Four-weekly payment: £921 Annual amount: £11,973 Full Basic State Pension Weekly payment: £176.45 Four-weekly payment: £705.80 Annual amount: £9,175 Future new State Pension forecasts Under a 2.5 per cent increase, the full New State Pension will be worth: 2026/27 - £236 per week, £12,227.30 a year 2027/28 - £241.90 per week, £12,578.80 a year What is taxed Guidance on states: 'You pay tax if your total annual income adds up to more than your Personal Allowance. Find out about your Personal Allowance and Income Tax rates. Your total income could include: the State Pension you get - Basic or New State Pension Additional State Pension a private pension (workplace or personal) - you can take some of this tax-free earnings from employment or self-employment any taxable benefits you get any other income, such as money from investments, property or savings Check if you have to pay tax on your pension Before you can check, you will need to know: if you have a State Pension or a private pension how much State Pension and private pension income you will get this tax year (April 6 to April 5) the amount of any other taxable income you'll get this tax year (for example, from employment or state benefits) You cannot use this tool if you get: any foreign income Marriage Allowance Blind Person's Allowance Use this online tool at to check if you have to pay tax on your pension. The full guide to tax when you get a pension can be found on here.
Daily Record
3 days ago
- Politics
- Daily Record
New update on calls to increase State Pension to £427 each week to match minimum wage
More than 10,000 people have signed an online petition supporting calls to increase the State Pension to match the National Living Wage rate. More than 10,100 people have signed an online petition urging the UK Government to increase the New State Pension from £11,973 a year to £22,000, matching the annual income of someone working a 35-hour week on the National Living Wage. The petition is now entitled to a written response, most-likely from the Department for Work and Pensions (DWP). The proposal put forward by Ken Marshall has been posted on the UK Government's Petitions Parliament website and would see all pensioners receive £427.35 each week - some £1,709 every four-week payment period - in-line with the 2025/26 National Living Wage rate of £12.21 per hour. The campaigner argues that the discrepancy between the State Pension and National Living Wage payments is 'distressing' and 'we must not allow our senior citizens, who have contributed so much to our society, to struggle through their sunset years'. Mr Marshall says that bringing the payments for 13 million pensioners into line with the National Living Wage is a 'matter of fairness and respect'. The 'pay pensioners the equivalent of the living wage of a 35 hour week ' petition has been posted on the Petitions Parliament website and states: 'The full rate of the New State Pension is now £11,973 a year, while the annual income derived from the National Living Wage for a 35-hour week will be above £22,000. We think there is a distressing discrepancy between these two figures. 'We must not allow our senior citizens, who have contributed so much to our society, to struggle through their sunset years. We consider that it is a matter of fairness and respect. We all deserve a decent life when we get old.' It concludes: 'We believe that all pensioners must receive the equivalent of the living wage at 35 hours a week as a minimum. This could ensure a better quality of life for our country's senior citizens and help ensure that no elderly person in our society has to face financial hardship.' At 100,000, the petition would be considered by the Petitions Committee for debate in Parliament. You can view it in full here. National Minimum Wage rates 2025/26 The National Minimum Wage for people over 21 is now: £12.21 per hour £427.35 for a typical 35-hour working week £,709.40 every four-week pay period or £1,851.85 per month £22,222.20 over the 2025/26 financial year State Pension payment rates 2025/26 Full New State Pension Weekly payment: £230.25 Four-weekly payment: £921 Annual amount: £11,973 Full Basic State Pension Weekly payment: £176.45 Four-weekly payment: £705.80 Annual amount: £9,175 Future State Pension increases The Labour Government has pledged to honour the Triple Lock or the next five years and the latest predictions show the following projected annual increases: 2025/26 - 4.1% (the forecast was 4%) 2026/27 - 2.5% 2027/28 - 2.5% 2028/29 - 2.5% 2029/30 - 2.5% The Department for Work and Pensions (DWP) recently rejected proposals in a similar petition calling for the State Pension to increase to £549 every week for every person over the age of 60. In a written response earlier this year, the DWP said that the UK Government 'has no plans to make State Pension available from the age of 60 or to increase State Pension to equal 48 hours of work a week at the National Living Wage'. The DWP response said that the UK Government is 'committed to supporting current and future generations of pensioners and giving them the dignity and security they deserve in retirement' and highlighted Labour's commitment to the Triple Lock for the duration of this Parliament. The DWP continued: 'The State Pension and the National Living Wage have different purposes, and a direct comparison cannot be drawn. The National Living Wage is designed to protect low-income workers and provide an incentive to work. 'It is also worth noting that while State Pension is an entitlement based on a person's National Insurance record, it is legally a benefit. From the time of the 1946 National Insurance Act, which applied from the inception of the National Insurance scheme, retirement pension (latterly also known as State Pension), has always been classified in law as a 'benefit'.' DWP also explained how the New State Pension was introduced in 2016 to be a 'simpler, clearer, sustainable foundation for private saving, including workplace pensions supported through Automatic Enrolment'. DWP added: 'The introduction of Automatic Enrolment has both increased and equalised workplace pension participation rates between eligible men and women in the private sector. Together, the New State Pension and Automatic Enrolment provide a robust system for retirement provision for decades to come, with those on low incomes supported by Pension Credit which continues to provide a safety net.' The DWP also said there are no plans to bring the State Pension age back down to 60, explaining how it is a pay-as-you-go system funded by current taxpayers.
Daily Record
3 days ago
- Business
- Daily Record
Older people living on their own could be due State Pension top-up of £4,300
Pension Credit claims can be backdated by up to three months and provide access to heating help during winter. Pension Credit – Could you or someone you know be eligible? The Department for Work and Pensions (DWP) recently confirmed that nearly 78 per cent of all new claims for Pension Credit are processed - from initial application to award decision letter - within the target timeframe of 50 working days. This means older people on a low income making a new claim this month, especially those living on their own, could receive their first payment and any arrears by mid-August. Despite the full New State Pension now worth £230.25 per week and the full Basic State Pension worth £176.45, data from the Office for National Statistics (ONS) shows that in 2021, some 3.3 million people aged 65 years and over were living alone in England and Wales, with around 337,000 single pensioner households recorded in Scotland. It's crucial for all older people - single, married or cohabiting - to make sure they are claiming all the additional financial support they are entitled to this year to help boost their income and offset the ongoing impact of the cost of living. The eligibility rule change to the annual Winter Fuel Payment last year means that only pensioners in claim for certain benefits, such as Pension Credit, received the 2024/25 payment. However, Sir Keir Starmer recently announced that the UK Government wants to see "more pensioners" qualify for the heating help and speculation is growing that Chancellor Rachel Reeves will confirm a widening of eligibility rules during the Spending Review on June 11. It's important to note that older people in Scotland making a successful new claim for Pension Credit before September this year will qualify for the 2025/26 payment and the higher rate of the devolved Pension Age Winter Hating Payment (Scotland-only). Pension Credit is the most under-claimed benefit and is specifically aimed at providing additional financial support for older people on a low income - singles and couples. Nearly 1.4 million older people across Great Britain, including more than 125,000 living in Scotland, are currently receiving the means-tested benefit that could provide an average of £4,300 in extra support during the coming months. Some older people think because they have savings or own their home they would not be eligible for the means-tested benefit, which can also provide access to help with housing costs, heating bills and Council Tax. An award of just £1 per week is enough to unlock other support. Below is an overview of the benefit including who should check eligibility, how to go about it, how much you could get and where to get help filling in the form. Who can claim Pension Credit? There are two types of Pension Credit - Guarantee Credit and Savings Credit. To qualify for Guarantee Pension Credit, you must be State Pension age (66). Your weekly income will need to be less than the minimum amount the UK Government says you need to live on. This is £227.10 for a single person and £346.60 for a couple - this amount could be higher if you're disabled, a carer or have certain housing costs. You can only get Savings Credit if: you reached State Pension age before April 6, 2016, or you have a partner who reached State Pension age before this date and was already receiving it you have qualifying income of at least £198.27 a week for a single person and £314.34 a week for a couple How much could you receive from DWP? Guarantee Credit tops up your weekly income to: £227.10 for a single person £346.60 for a couple (married, in a civil partnership or cohabiting) You might be able to get more than this if you're disabled or a carer, or you have certain housing costs. Savings Credit can give you up to: £17.30 a week for a single person £19.36 a week for a couple (married, in a civil partnership or cohabiting). The exact amount you'll get depends on your income and savings. Your income includes assumed income from savings and capital over £10,000. How to check eligibility for Pension Credit Older people, or friends and family, can quickly check their eligibility and get an estimate of what they may receive by using the online Pension Credit calculator on here. Alternatively, pensioners can contact the Pension Credit helpline directly to make a claim on 0800 99 1234 - lines are open 8am to 6pm, Monday to Friday. Expert help and advice is also available from: Independent Age Income Max Citizens Advice Age UK Other help if you get Pension Credit If you qualify for Pension Credit you can also get other help, such as: Housing Benefit if you rent the property you live in Support for Mortgage Interest if you own the property you live in Council Tax discount Free TV licence if you are aged 75 or over Help with NHS dental treatment, glasses and transport costs for hospital appointments Help with your heating costs through the Warm Home Discount Scheme, Winter Fuel Payments or Pension Age Winter Heating Payment A discount on the Royal Mail redirection service if you are moving house Mixed aged older couples and Pension Credit In May 2019, the law changed so a 'mixed age couple' - a couple where one partner is of State Pension age and the other is under it - are considered to be a 'working age' couple when checking entitlement to means-tested benefits. This means they cannot claim Pension Credit or pension age Housing Benefit until they are both State Pension age. Before this DWP change, a mixed age couple could be eligible to claim the more generous State Pension age benefits when just one of them reached State Pension age. How to use the Pension Credit calculator To use the calculator on you will need details of: earnings, benefits and pensions savings and investments You'll need the same details for your partner if you have one. You will be presented by a series of questions with multiple choice answer options. This includes: Your date of birth Your residential status Where in the UK you live Whether you are registered blind Which benefits you currently receive How much you receive each week for any benefits you get Whether someone is paid Carer's Allowance to look after you How much you get each week from pensions - State Pension, private and work pensions Any employment earnings Any savings, investments or bonds you have Once you have answered these questions, a summary screen shows your responses, allowing you to go back and change any answers before submitting. The Pension Credit calculator then displays how much benefit you could receive each week. All you have to do then is follow the link to the application page to find out exactly what you will get from the DWP, including access to other financial support. There's also an option to print off the answers you give using the calculator tool to help you complete the application form quicker without having to look out the same details again. Try the Pension Credit Calculator for yourself or your family member to make sure you're receiving all the financial support you are entitled to claim. Who cannot use the Pension Credit calculator? You cannot use the calculator if you or your partner: are deferring your State Pension own more than one property are self employed have housing costs (such as service charges or Crown Tenant rent) which are neither mortgage repayments nor rent covered by Housing Benefit How to make a claim You can start your application up to four months before you reach State Pension age. You can claim any time after you reach State Pension age but your claim can only be backdated for three months. This means you can get up to three months of Pension Credit in your first payment if you were eligible during that time. You will need: your National Insurance number information about your income, savings and investments your bank account details, if you're applying by phone or by post If you're backdating your claim, you'll need details of your income, savings and investments on the date you want your claim to start. Apply online You can use the online service if: you have already claimed your State Pension there are no children or young people included in your claim Article continues below To check your entitlement, phone the Pension Credit helpline on 0800 99 1234 or use the Pension Credit calculator here to find out how much you could get.
Wales Online
5 days ago
- Business
- Wales Online
People over certain age urged to claim £303 state pension boost
People over certain age urged to claim £303 state pension boost HMRC will add National Insurance credits to your State Pension if you look after a child related to you under the age of 12 - this can be worth a few thousand pounds over a typical 20-year retirement Elderly individuals who provide care for children under 12 during term-time or school holidays could potentially increase their State Pension payments by over £6,000 across a typical 20-year retirement period. This is possible through claiming a National Insurance benefit from HM Revenue and Customs (HMRC). A single additional National Insurance credit can add approximately £303 per year to the full New State Pension. This State Pension enhancement is known as Specified Adult Childcare. It operates by transferring the National Insurance credit linked to Child Benefit from the recipient of the Child Benefit to a family member who is caring for a related child under 12, or under 17 if the child has a disability. You will be granted a Class 3 National Insurance credit for each week or part of a week you cared for the child. However, only one credit is available per Child Benefit claim, regardless of the number of children included in the claim. For instance, if two grandparents cared for their daughter's two children, only one credit is available for transfer. The recipient of the Child Benefit must decide who receives the credit, reports the Daily Record. However, if the grandparents also have a son and they care for both their daughter's and son's children, there are likely two Child Benefit recipients. Therefore, two credits would be available for transfer. If no one has claimed Child Benefit for the child, there is no attached National Insurance credit to transfer and credits cannot be awarded. The boost is primarily designed for those caring for children whose parents are employed, meaning they don't require the National Insurance credits from Child Benefit for their own State Pension. It's worth noting that retrospective claims for Specified Adult Childcare can be made dating back to 6 April 2011. Claims for providing remote care during the Covid-19 pandemic According to guidance, your usual care arrangements may have been disrupted by Covid-19 since March 2020. This implies that if you provided care remotely via phone, text message or video call during the pandemic and subsequent lockdowns, you might be eligible to fill any gaps in your National Insurance record by claiming Specified Adult Childcare. This applies to the tax years 2019 to 2020 and 2020 to 2021. The full New State Pension amounts to £230.25 per week, equivalent to £11,973 annually. However, to receive this maximum amount, approximately 35 years' worth of National Insurance contributions are required. A minimum of 10 years is needed to receive any payment at all. Some individuals may have been 'contracted out' and will need more than 35 years. Who is eligible to apply for Specified Adult Childcare credits? You can apply provided: you are an eligible family member who provided care for a child under 12 you were over 16 and under State Pension age when you provided care for the child you are ordinarily resident in the UK but not the Channel Islands or the Isle of Man the child's parent (or main carer) has claimed Child Benefit but does not need the credits themselves The child's parent (or primary carer) consents to your application by counter-signing the form to confirm that you: provided care for their child for the period stated can have the credits for the period stated Who qualifies as an eligible family member You are classed as an eligible family member if you are the: mother or father who does not live with the child grandparent, great-grandparent or great-great-grandparent brother or sister - including a half-brother or half-sister, step-brother or step-sister, an adopted brother or an adopted sister, aunt or uncle You are also classed as an eligible family member if you are either the: current or previous husband, wife, partner or civil partner of anyone in the list above son or daughter of the current or previous husband, wife, partner or civil partner of anyone in the list above Who should refrain from applying You should not apply for credits if for the same period you: already have a qualifying year of National Insurance - usually because you work or receive other National Insurance credits are receiving Child Benefit for any child and already get credits automatically If you are the spouse or partner living with the Child Benefit recipient and want to transfer the credits to yourself, you need to complete form CF411A - more details here. When to submit your application You must wait until October 31 following the end of the tax year for which you want to apply. This means you can now claim for the financial years 2011/12 - 2023/24. This is due to HMRC needing to verify that the parent or primary carer already has a qualifying year for National Insurance purposes. What you require to apply You will need the following to apply: your personal details as the eligible family member that provided care for the child the child's details and the periods you provided care for them the personal details of the child's parent or main carer - the Child Benefit recipient Article continues below The HMRC guidance explains that both you and the Child Benefit recipient must sign a declaration on the application form. It also says that the child's parent or main carer should check their National Insurance record online before you apply, to check that they have credits to transfer. Complete information on how to apply can be found on the website.
Daily Record
27-05-2025
- Business
- Daily Record
Triple Lock creating two-tier State Pension for older people warns former DWP employee
The latest figures from the Department for Work and Pensions (DWP) show there are now 13 million people of State Pension age across Great Britain, including 1.1m in Scotland. Of that total, 34 per cent are in receipt of the New State Pension while 66 per cent receive the Basic/Old State Pension. Under the Triple Lock guarantee, the New and Basic State Pensions increase each year in-line with whichever is the highest between the average annual earnings growth from May to July, Consumer Price Index (CPI) inflation rate in the year to September, or 2.5 per cent. However, additional elements of the State Pension, including deferred amounts, rise by the September CPI rate, something a former DWP employee warns is creating a 'two-tier uprating system for pensioners'. Sandra Wrench has 42 years experience in dealing with State Pensions and benefits delivered by the DWP and previously wrote to DWP Ministers in 2023 expressing her concerns. Mrs Wrench told the Daily Record how some pensioners may not be aware that this year's Triple Lock uprating of 4.1 per cent only applies to the New and Basic State Pension payment rates; additional components have risen by 1.7 per cent - the September CPI inflation rate. This is also the uprating applied to Universal Credit and other benefits delivered by the DWP. It's important to highlight that devolved benefits in Scotland, including Adult and Child Disability Payment, Pension Age Disability Payment, Carer Support Payment and Pension Age Winter Heating Payment, also increased by 1.7 per cent this month. The ex-DWP employee said: 'The Triple Lock guarantee only covers the BASIC State Pension and not all components, the other components being Additional Pension (the scheme which existed between 1978-April 5, 2016 and which you could contract out of), Graduated Pension (1961-1975), increments for deferring your State Pension, and the protected pension which is any amount in excess of the 100% rate of the new 100% State Pension which you might be entitled to at April 6, 2016. 'With the calculation of the New State Pension at April 6, 2016, in most cases, all the components of the old State Pension have been added together to give a basic State Pension, and where applicable a protected pension, which is the excess above the 100% rate of the New State Pension. 'So by adding all the components together this has brought components such as additional pension, within the scope of the Triple Lock, which was 4.1% this April 2025. Under the old scheme, additional pension would have just been increased by the CPI rate of 1.7% for this April 2025.' Mrs Wrench warned: 'With The Triple Lock relating to the basic rates of the State Pension only, this has created a two-tier uprating system for those who reached State Pension Age before April 2016 where the 100% rate of the Old/Basic State Pension is currently £176.45 a week and those who reached retirement age after April 2016 where the 100% rate of the New State Pension is higher at £230.25.' She shared an example to help illustrate the difference: A person who was State Pension Age before April 2016, has a weekly amount of State Pension as £240.00, consisting of 100% Old/Basic State Pension of £176.45, additional pension of £59.75 and graduated pension of £3.80. Compare this with a person who reached State Pension Age after April 2016, who also has a weekly pension of £240.00, but this consists of 100% New State Pension of £230.25 and a protected payment of £9.75. In April 2026, the person who reached State Pension Age before April 2016, will only have £176.45 increased by the Triple Lock, compared with a person who reached State Pension Age after April 2016, who will have a higher amount of £230.25 increased by the Triple Lock. Mrs Wrench continued: 'You can see how a person who reached State Pension Age before April 2016 has a lower percentage of their State Pension uprated by the Triple Lock compared with those who reached State Pension Age after April 2016. 'Because of this difference in basic pension and the Triple lock only relating to the basic rate of the State Pension, this will inevitably lead to those who reached State Pension Age before April 2016 falling further behind with every annual uprating.' The insider explained that when the Triple Lock was introduced in 2011, there was only one State Pension (Old/Basic), but the introduction of the New State Pension in April 2016, calls into question whether it should also be uprated under the Triple Lock. However, she warns that any future adjustment to the Triple Lock 'will particularly affect poorer pensioners, such as those who do not have other sources of income, those who are disabled and not able to work full time, and women with caring responsibilities who have had to work part time and who may not have had the opportunity to build up any private or work pension'. Mrs Wrench added: 'The DWP have confirmed they cannot means-test the State Pension, so possibly the only way that the increased costs for State Pension can be addressed is through some adjustment to the Triple Lock, and to reassess the annual uprating of the State Pension. Mrs Wrench shared two examples to help highlight the uprating impact: From April 6, 2016, a woman, who is State Pension Age after April 2016. has a Basic State Pension of £63.63, and Additional Pension of £24.82. These two components were added together on April 6, 2016 to give her a starting amount of £88.45 for the New State Pension, and this £88.45 is now all Basic State Pension under the new scheme. If you were State Pension Age before April 2016, under the old scheme the basic State Pension of £63.63 would have increased by the Triple Lock, and the additional pension of £24.82 increased by the lower CPI rate , but by adding the two together for the New State Pension from April 6, 2016, this means that all this amount is basic state Pension and increases by the Triple Lock. So those who are State Pension Age after April 2016 are at an advantage compared to those who reached retirement age before April 2016, as regards the Triple Lock increase. A person who reached State Pension Age after April 6, 2016 has the full 100% rate of the basic State Pension which was then £119.30 (under the old scheme) and Additional Pension of £75.00. Basic £119.30 plus AP £75.00 = £194.30 at April 6, 2016, which was converted into the 100% rate of the New State Pension of £155.65 (the 100% rate at April 6, 2016) plus a protected payment of £38.65. Basic State Pension increases by the Triple Lock, but protected payment increases by CPI rate, so some of the additional pension has been converted into Basic State Pension and brought within the scope of The Triple Lock. State Pension payments 2025/26 The DWP has published the full list of State Pension and benefit uprated payments on here, which also includes additional elements such as the deferred rates, which have risen by 1.7 per cent (September Consumer Price Index inflation rate). Full New State Pension Weekly payment: £230.25 Fortnightly payment: £460.50 Four-weekly payment: £921 Annual amount: £11,973 Full Basic State Pension Weekly payment: £176.45 Fortnightly payment: £352.90 Four-weekly payment: £705.80 Annual amount: £9,175 Future State Pension increases The Labour Government has pledged to honour the Triple Lock or the duration of its term and the latest predictions show the following projected annual increases: 2025/26 - 4.1%, the forecast was 4% 2026/27 - 2.5% 2027/28 - 2.5% 2028/29 - 2.5% 2029/30 - 2.5%
