09. State pensions & individual's pension planning Flashcards
(48 cards)
What types of pensions could someone reaching SPA before 6 April 2016 potentially receive?
Basic state pension and possibly Additional State Pension(s).
What is a full single person’s BSP for 2023/24?
£156.20 p.w.
How many qualifying years did someone who reached SPA before 6 April 2010 need?
Years equalling 90% of their ‘working life’, where working life was:
- 49 years for men.
- 44 years for women.
For those reaching SPA before 6 April 2010, what was the minimum qualification period to receive BSP?
25% of the maximum amount, i.e. 11 years for men (49 x 25%) and 10 years for women (44 x 25%).
From what dates could a person qualify for the full BSP (Category A pension)?
From 6 April 2010 to 6 April 2016.
BSP (Category A) pensions started after how many years of NICs?
1 year.
How many qualifying years are required to earn the maximum BSP?
30.
Each year provides 1/30th of full pension.
Name 2 alternative individuals who reached SPA before 6 April 2016 that may qualify for a Category A pension.
- Divorcees using qualifying years of their former spouse.
- Widows/widowers not entitled to a Widow’s Pension or bereavement benefits, or entitled to long-term incapacity benefit.
Who might receive Category B pensions and under what conditions?
Dependants of those who were entitled to Category A pensions who reached SPA with less than 18 qualifying years, e.g. non-working spouses.
Who were the Additional State Pension schemes not available to?
The self-employed.
Name the 3 Additional State Pensions and when they applied.
- Graduated Retirement Benefit (GRB): 1961 - 1975.
- State Earnings Related Pension Scheme (SERPS): 1978 - 2002.
- State Second Pension (S2P): 2002 - 2016.
How were the Additional State Pension schemes increased?
By CPI (not the triple-lock).
What was ‘contracting out’ and why was it done for both DB & DC schemes?
- Forsaking additional pension benefits.
- For a reduction in NICs (DB).
- For an equivalent being paid into a separate personal arrangement (DC).
What will those who reach SPA after 6 April 2016 receive?
The new State Pension, a.k.a. ‘single-tier State Pension’.
What are the minimum qualifying years to receive the NSP?
10.
How many qualifying years are need to receive the full NSP?
35.
Each year provides 1/35th of full pension.
How much is the full NSP for 2023/24?
£203.85 p.w.
How was the starting / foundation amount calculated?
A one-off calculation which worked out higher of:
- entitlement under BSP rules with top-ups and;
- entitlement if NSP had been in place all along.
When calculating the starting / foundation amount, what rate of NSP for 2016/17 was used?
£155.65 p.w.
If individuals were entitled to more than the NSP due to the top-ups, what did they receive?
A protected payment.
Who was likely to receive:
- more than the NSP?
- exact NSP?
- less than the NSP?
- Employees contracted-in for most of their working life.
- Self-employed with 35 years of NICs.
- Employees contracted-out for most of their working life and newbies.
On what basis is the State Pension funded?
On a ‘Pay as you go’ basis.
Which NIC class does not contribute to State Pension entitlement?
Class 4.
An individual may receive credits towards their Class 1 or Class 3 NIC record if they receive certain ~~.
- State benefits.
