On 6th April 2010, various modifications were made by the Department for work & pensions targeted at helping adult females, carers and small wage earners in retirement, but it was not good news for everyone.

One of the most profound changes is the inflated minimum age for getting a retirement pension. From 6th April, the minimum pension age rose to age 55, impacting more than four million people who were born between the 6th April nineteen fifty five & 5th April nineteen sixty who will now have to delay for up to 5 yrs to draw their retirement pension.

The state pension age for adult females also started to increase from Sixth April until it reaches 65 in two thousand and twenty. By thousand and twenty six , it is set to increase to 66 for everyone, until it in the end gets to 68 in 2046.

Other changes include a reduction in the National Ins (NI) contributions needed to qualify for the maximum basic state pension, which raised from £95.25 a wk to £97.65 a week from the 6th April. Men & adult females will in the future need to accumulate up just 30 years of contributions, which the state anticipates will allow for an additional forty thousand women who get to pension age in the next tax year to qualify for the full state pension.

The state 2nd pension will also be impacted by the reforms & now payments within the upper earnings threshold have been reduced from 20 per cent to 10 %. Further down the line, this will be altered to a flat rate payment rather than an earnings-related pension, and will continue to be related to inflation, not salary.
A different credits system supersedes the Home Responsibilities Protection (HRP) scheme, which is designed to help parents & carers to qualify for the state pension. From the 6 April, relevant yrs can now be made up by weekly credits. These can then be added on to any paid contributions made when at work, with no limit on the credits awarded, as long as the qualifying rules are met.

For those reaching basic state pension age after this modification takes effect, each complete year of HRP, up to a maximum of 22 years, will be converted into qualifying years for the basic state pension.

Consilium Asset Management provide retirement planningadvice to clients in the Bristol Area