People of all ages are concerned about how they will cope financially when they retire. Indeed, it is one of the key stressors for those people in their 40s and 50s.
The full state pension amount stands a £159.55 per week per person, as at September 2017. By 2020, the state pension age for men and women will be the 66 (dependant on birth year). It is never too early to start saving for your retirement or paying into a pension plan. Indeed, automatic enrolment, which was introduced in 2008, means that employers have to make a contribution to the pension pot of workers earning above a certain amount, as well as providing the option for employees to contribute to a pension plan.
According to recently released government figures, almost £3.3billion worth of pension credit is going unclaimed annually. This works out as an annual value of over £2000 per family who are entitled to it, and it is thought that as many as 40% of pensioners are missing out on this income boost in their retirement years.
What is the pension credit?
The pension credit is a non-taxable benefit that is based on a person's income. The intention is that it provides pensioners with an income boost to ensure a minimum weekly income. In the tax year 2015/16, over £6bn was claimed by those pensioners on low income. The credit comes in two parts:
- The guarantee credit - tops up weekly income to a minimum level
- The savings credit - a small extra amount if you’ve got some savings or an income above the basic state pension amount. Although only available to those who reached state pension age prior to April 2016, this can be up to £14.90/week (for couples).
To find out if you are eligible for this credit, you can visit www.gov.uk/pension-credit, and use their online calculator.