With further government changes to State Pensions currently being
considered, Good Morning Britain and This Morning’s Money Saving expert
Martin Lewis has revealed his best State Pension top up tip to help
boost your allowance.
The current State Pension age is 65 for men and slowly rising for women. The State Pension age for women will reach 64 and six months by April 2018. Both men’s and women’s pension age will eventually rise to 68 between 2044 and 2046 following changes announced by the government last week.
Your State Pension age is worked out based on your date of birth and your gender. The most you can currently get is £122.30 per week, as long as you have paid or been credited with National Insurance contributions throughout your working life.
Financial expert Martin Lewis suggests opting in for a State pension top up from your employer to increase the amount in your pension pot. A benefit offered by many businesses, there are various different schemes on offer by employers to boost your pension pot total.
Martin said, “This is effectively a pay rise, so don’t give that away, plus there’s no tax to pay on that contribution.”
“It may not be going into your pay packet, but it is cash going towards your future.”
“You may not have the cash to afford the compulsory contributions, and there’s not point getting into costly debt if that’s the case” he added.
“But in the long term, it’s the most effective way to save.”
If you’ve been on a workplace, personal or stakeholder pension plan, then your State Pension amount may be affected. This includes if you have been ‘contracted out’ of the Additional State Pension. Find out if your State Pension amount is affected here.
If you are looking at the possibility of early retirement, then it is likely you will need a workplace, personal or stakeholder pension plan.
Once you reach State Pension age, you are not obliged to stop working, but you will no longer have to pay National Insurance out of your monthly paycheque.