The clock is ticking on the introduction of the new flat rate state pension – with less than 600 days to go until the new scheme kicks off.
The big day is April 6, 2016, when anyone reaching state pension age after that date is set to receive the new enhanced payment.
That includes all women born after April 5, 1953 and all men born after April 5, 1951.
The new full rate payment is above the current standard minimum guarantee of £148.35 a week for a single pensioner.
That adds up to a state pension of £7,714.20 a year, but is likely to rise at least 2.5% a year in line with the government’s triple-lock guarantee. The guarantee is a pledge to increase the state pension by inflation, average earnings or a minimum of 2.5%, whichever is the highest.
Triple lock and how much you will get
A 2.5% increase in 2015 and 2016 would take the pension up to £155.86 a week or £8,104 a year.
Payments will depend on qualifying pension years collected during the pensioner’s working life.
For the full payment, the target is 35 years – a five year increase on the current 30 years.
The Department of Work and Pensions reckons a fifth of retirees will receive the full amount before 2020, but from then three-quarters of retirees can expect the full payment.
Under the triple lock, the pension should be worth £172 a week or £8,946 a year, assuming a 2.5% a year increase.
Fairer deal irons out pension wrinkles
The government claims women have the most to gain from the flat rate state pension as the time they may have spent bringing up a family is better recognised under the new rules.
Around 650,000 women will find they are £8 a week better off under transitional rules into the new pension.
Pensions minister Steve Webb said: “The new state pension will iron out a lot of wrinkles under the current system and offer a fairer deal to those who have felt hard done by under today’s rules.
“People will know how much to expect when they retire and can make better financial plans for their later lives.”
Those approaching retirement will soon have access to a state pension forecast outlining how much they will be paid in retirement when a new State Pension Service comes into being.