Free pension statement for over-55s


Published: Saturday 7th February 2015 by The News Editor

Comments (0)

Everyone aged over 55 will now be entitled to a free state pension statement which will help them to plan their retirement, the Government has announced.

The personalised statements, which people will receive on request, will give an estimate of what they are likely to receive, based on their National Insurance record so far.

Up until now, this service, which was launched last September and has already issued more than 76,000 statements since its launch, has only been available to people aged over 60.

Around 5.5 million people are now able to request a pension statement under the new rules and the service will be gradually extended until everybody of working age will be able to request one.

The Government said that extending the service to people from the age of 55 will equip them with vital information about the state of their finances as they weigh up their options under the new pension freedoms which come into force from April 6.

The freedoms mean that people aged 55 and over with a defined contribution (DC) pension will no longer be herded towards buying a retirement annuity. Instead, they will be able to take their pension pot how they wish to, subject to their marginal tax rate in that year.

Some concerns have been raised that people may run through their cash too quickly as a result of the freedoms. But a pension statement will give them an indication of how much money they will have to live on from the state in their old age, enabling them to gain a fuller overview of all their pension money.

Before people take advantage of the new freedoms, they will be encouraged to seek free and impartial guidance on their retirement choices from the new Government service, called Pension Wise. This will encourage users to obtain a pension statement, as well as providing other information.

The statement gives an estimated pension amount, not a guaranteed amount, as it is based on someone’s current record and does not look at possible future years of national insurance contributions.

Pensions Minister Steve Webb said: “I’ve always been clear that people should be given the freedom to make their own financial decisions – but it’s crucial everyone has all the information to help them to make the right choices.

“We are making sure people have the resources and support they need ahead of the new freedoms in April, so they can take the time to plan how to best use their pension saving for a secure retirement.

“Now we have expanded the statement service, there is no reason why anyone who wants to exercise their new pension freedoms on day one shouldn’t be able to. That said, there is nothing magical about April 6, and many people will want to take their time, both to consider fully all the options and to see what new financial products come on the market during 2015.”

Statements can be obtained by calling the Newcastle Pension Centre (Futures Group) on 0345 3000168, downloading an application form from the website or writing to The Pension Service 9, Mail Handling Site A, Wolverhampton, WV98 1LU.

Age UK’s charity director, Caroline Abrahams, said: ” This will a big help to many people, giving them a clearer idea about what the state will provide and therefore making it easier to plan their retirement savings while there is still time.”

Published: Saturday 7th February 2015 by The News Editor

Comments (0)

Local business search