Friday 15th August marked 600 days until the start of the new State Pension – on 6 April 2016. The new system will be simpler for people to understand and create a solid base for extra saving – with the full level set above the basic means-test level for pension credit, which in 2014/15 is £148.35.
Women will be among the main winners from the new system – as time they have spent out of the workforce for caring and bringing up children is better recognised.
Some 650,000 women will receive an average of £8 a week more – or around £400 a year – in the first 10 years, from the way their National Insurance contributions (NI) are valued under the transition to the new system.
Around 80% of those reaching State Pension age by the mid-2030s are expected to be in receipt of a full State Pension – and even those who receive less than the full rate, because of insufficient National Insurance contributions, will, in many cases, be better off than they would be today.
Minister for Pensions Steve Webb said:
"The new State Pension will be a much fairer system and is designed to help groups which have traditionally been disadvantaged – including women and the low-paid – to build a strong financial foundation for their retirement.
In the future, all years spent contributing to society whether through paid work or caring responsibilities will be of equal value.
We are also helping more women to save for later life. Workers are now being automatically enrolled into workplace pensions – and millions of women will be saving for the first time as a result.
The new State Pension will be a clear improvement on the current system, removing layers of complexities. It’s part of our work to abolish outdated inequalities and create a fairer society.
People receiving less than the full rate of the new State Pension may have the opportunity to make voluntary National Insurance contributions in order to maximise their State Pension income in retirement.
Those reaching State Pension age in the first years after the introduction of the reforms will be able to check how much they will be eligible for using a new State Pension Statement service from later this year."
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