What Exactly Do You Get With An Old Age Pension?

Are you prepared to work until you are 67 or over? Do you know how much Old Age Pension you will receive on retirement? Recent studies show that many people are totally clueless when it comes to their Old Age Pension and that the increased discussion of the Pension Crisis is impelling an increasing number of people to begin seriously researching their future pension options. Below we examine what the Old Age Pension is and how you can best obtain pension advice to suit your personal needs.

What Is An Old Age Pension?

An Old Age Pension, also known as a State Pension, is a pension paid to every worker in the UK who has paid National Insurance Contributions. It is payable on reaching Old Age Pension age. For men the Old Age Pension age currently stands at 65 and for women it can be between ages of 60 or 65, depending on the year of birth.

Does Everybody Receive An Old Age Pension?

No, only workers who have made enough National Insurance Contributions will receive an Old Age Pension. These contributions are payable from the age of 16 to 65. This does not mean that you will have to work 49 years in order to contribute enough. It is worth noting that National Insurance Contributions can sometimes be made on your behalf when you are unemployed or a full time carer and that you can also make voluntary contributions, if, for example you have a National Insurance shortfall in a particular year. Furthermore, you are allowed five full years of no contributions at all. This means that you actually have to contribute enough for 44 years in order to qualify for a State Pension at the age of 65. If you have not paid enough contributions you may receive a partial pension or if you have paid less than 25% you may receive nothing at all.

Will Women Get A Different Old Age Pension To Men?

As an increasing number of women are now in full-time or part-time employment and are also returning to work after having children much quicker than previous generations, the attitudes towards women at work is going through a transitional phase. The Old Age Pension Scheme is similarly going through a state of transition regarding women and their pensions. Between 2010 and 2020 the Old Age Pension age will change so that it will be 65 for both men and women. This will not affect any women born before 1950.

The Department for Work and Pensions recently estimated more than two million women are not building up any entitlement to the basic state pension. Over recent years a woman's income may now be more equal to a man's but her employment history may still have gaps because she has fulfilled the role of a carer or maybe she was on a low income. In addition, women are less likely to have a private pension than men.

How Much Money Will You Receive With Your Old Age Pension?

If you have paid enough National Insurance Contributions the current State Pension amount for 2005/6 is £82.05 (single) and £131.50. This will increase annually in line with the Retail Price Index.