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Worried about your pension?

It’s easy not to think about your pension while you are working and earning a salary. But now that life expectancy is longer, you could live for decades without earning after retirement. A woman who is 80 is on average expected to live to 91 and a man who is 80 now is on average expected to live to 89.

Working out how much state pension (SP) you will receive is complicated by the fact that there is the basic pension and the additional pension (State Earnings Related Pension Scheme). Some people will have contracted out of SERPS when taking on a private pension scheme.

Visit this web page to find out how much state pension you will get and when you get it and how to increase it (if you are eligible)

Another route is through your HMRC government gateway account if you one (for submitting online tax returns). If you do not have an account, it is very easy to set one up, but you need your NI number.

Not many people know that the government offer a free pensions advice service: The Pension Advisory Service. Free advice is available over the phone and by webchat. Their website is another source full of useful information.

They advise on company pensions, private pension policies and self-invested pensions, as well as the state pension. Assistance is also available in resolving disputes with pension companies.

The service deal with queries such as:

  • What happens when you divorce or die,
  • Tracing lost pensions,
  • Working overseas and foreign pensions,
  • Selling a company pension,
  • Tax issues (for example on drawdown).

They can also advise on when you should start claiming your state pension. This does not start automatically when you reach pensionable age. You have to claim and there can be good reasons for deferring the SP, such as if you are still working and would have to pay a lot of tax on the SP income.

Deferring your state pension could mean that you receive a higher pension when you do claim. Again, the Pensions Advisory Service will advise.