State Pensions - FAQ

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Introduction

If you have a question to which you cannot find an answer in the pensions guide then please fill in a Frequently Asked Question (FAQ) request form.  If we think your question is likely to be a popular one we will add it to either the FAQ section of the site or incorporate it into the pensions guide. We can not promise to answer every question posted but if we do answer one then we will try and let you know where to find the answer via email. Remember to include as much detail as possible to help us understand the problem in more detail. If you require individual financial advice then click here to be contacted by a qualified financial adviser.

FAQ as of 07 August 2008

Q1 - Retiring outside the UK - My wife and I are planning to retire in Spain. Will we still be able to collect our State Pensions or will we lose our entitlement altogether? A1 - You will still be entitled to the state pension that you earned before you left the UK. The payments themselves can still be made to you while you are living abroad. The Pensions Service International Pension Centre have a wealth of information on this subject just click here or telephone 0191 218 7777 for more information. Q2 - A State Pension forecast - How can I get a forecast of my state pension? Can I get one through Essential Pensions? A2 - A forecast of your state pension can be obtained from the government. They do not have an online facility instead you must write or telephone their forecasting department. See the pensions guide for full information. Essential Pensions can provide you with an approximate assessment of your state pension through the Pensions Calculator. Q3 - Working in retirement and its affect on state pensions - How much can I earn in retirement without affecting my entitlement to my state pension? A3 - The amount of your Basic State Pension and Additional State Pension are unaffected by the amount of your earnings in retirement, they are calculated based on your earnings and national insurance history whilst you are working. Some state benefits such as the Pension Credit are affected by your earnings (and also by any savings you might have).  Essentially if you earn more than around £100 a week then you will not receive any 'guarantee credits'. However you may be entitled to some 'savings credit' for any non-state pensions you might have (to a limit). Unfortunately there is no simple way of explaining the pension credit, it is a very complex animal. Read the guide for more information. Q4 - Minimum number of NI stamps for the Basic State Pension - What is the minimum number of NI stamps I need to qualify for a full state pension? A4 - This is covered in more detail in the pension guide. Basically you need 90% of the number of years between your 16th birthday and your State Pension Age. The pension guide reveals the full deatils. Q5 - Opting out of the Basic State Pension - Can I opt out of the Basic State Pension and receive a refund of my national insurance contributions. A5 - It is not possible to opt-out of the Basic State Pension or to receive a refund of national insurance. Only the State Additional Pension can be "opted-out of" in the form of contracting-out. Q6 - Early retirement without losing state benefits - If I retire early (at age 50 say) then can I continue to pay into the state scheme to get a full Basic State Pension? A6 - It is possible to continue to accrued NI stamps even when you are not working by paying what are called class 3 national insurance contributions. I suggest you contact your local social security office for more details and to get a quote of the annual cost. It might then be wise to seek independent financial advice as to whether this is worthwhile or not.