2015 has been an exciting year for UK pensions with more workers in small and micro firms being enrolled in a workplace pension. And 2016 looks set to be even busier.2016 will see the launch of the new State Pension in April as well as the launch of a toolkit for employers to help them retain, retrain and recruit older workers.
In the spirit of the festive season, I’ve collected together 12 facts about the State Pension and retirement in the UK – a couple of which you may not know and few that I hope you do! You could also have a go at our new pensions quiz on the ‘Are you a pensions Christmas cracker?’.
1. Did you know that 13 million people are eligible for the UK State Pension? That’s equivalent to 1 in 5 of the UK population.
2. The new State Pension launches on 6 April 2016. From then on, people whose Starting Amount is less than the full rate will be able to increase their State Pension amount by around £4.45 a week for each qualifying year, until they reach either State Pension age or the full new State Pension amount of £155.65 per week (providing they satisfy the Minimum Qualifying Period of 10 years). Find out more about how the new system will affect you at gov.uk/yourstatepension.
3. By 2024, the UK will have 3.2 million more people aged between 50 and State Pension age than in 2014 – but 200,000 fewer people aged 16 to 49. Employment rates for those aged 50-54 have increased by 5% in the last 10 years, with the employment rate for those aged 65+ more than doubling over the past 15 years. More and more people are deciding to retire later than before. Why not, if they are fit, healthy and looking to increase their current income or their pension? Find out more about our plans in our Fuller Working Lives Framework for Action.
4. In 1991, a 65 year old woman in the UK could expect to live, on average, for another 19 years. In 2015, that’s increased to 24 years. A 65 year old man can now expect to live for another 22 years. That’s compared to just 16 in 1991; an increase of 6 years in just one generation.
5. In 2014/15, DWP’s expenditure on the State Pension (GB and overseas) was £87 billion.
6. Everyone reaching State Pension age before 6 April 2016 will stay on the current State Pension system. If this applies to you, then you have the option of making a voluntary National Insurance (NI) contribution to ‘top up’ your additional State Pension by up to £25 per week. Find out more at gov.uk/statepensiontopup.
7. Between September 2014 and October 2015, we issued almost 500,000 State Pension statements. Did you know that anyone over the age of 55 can request a new State Pension statement? This will tell you how much you may receive based on your contributions to date. Find out more at gov.uk/state-pension-statement.
8. Many of those who will receive the new State Pension and have been contracted-out in the past, could be better off over their lifetime. From 6 April 2016, the option to contract-out of the additional State Pension will come to an end, but the vast majority reaching State Pension age in the next 20 years, who were previously contracted-out, will receive enough extra State Pension over their retirement to offset their increased NI contributions. Find out more about the end of contracting out.
9. Did you know that DWP provides Pension Credit to 2.6 million pensioners, in over 2 million households around the UK (as of May 2015)? This income-related benefit targets help at the UK’s poorest pensioners. Under the new system, customers who don’t receive the full new State Pension amount may be able to claim Guarantee Credit (if they meet the qualifying conditions), which will increase their household income to just below the full new State Pension amount. Find out more about Pension Credit at gov.uk/pension-credit.
10. Did you know that 1 in 3 babies born today are expected to live to 100 years old?
11. Did you know that since 1994/95, the average income of a UK pensioner household has grown by 64%?
12. And a final fact from Workie. Over 5.5 million employees now have a workplace pension, with 67,892 employers having enrolled their staff (figures as of October 2015). Don’t ignore the workplace pension. Find out more at workplacepensions.gov.uk.
May I take this opportunity to wish you all a very merry Christmas and a happy 2016.
Data sources
- DWP Tabulation Tool (May 2015 data)
- ONS 2014-based National Population Projections; ONS monthly labour market data for December 2015
- ONS, 2012-based projections on Cohort Life expectancy
- DWP Benefit expenditure and caseload tables
- DWP State Pension statement statistics, December 2015
- DWP Tabulation Tool (May 2015 data; February 2015 for PC)
- ONS 2012-based Historic and Projected Mortality Data
- Pensioners’ Incomes Series
- The Pensions Regulator Automatic Enrolment Declaration of Compliance report, July 2012 – end October 2015