PENSIONS 
 
The Governemnt announced some changes to the State Pension entitlement. Find out what they mean to you in this article. 
 
Allowances 
 
The lifetime allowance for pension contributions remains frozen at £1,073,100 until 5 April 2026. 
 
The annual allowance remains at £40,000 but this is tapered - £1 for every £2 of excess income over £240,000, down to maximum of £4,000 if earnings over £312,000. 
 
Under the new rules adjusted income of £300,000 would equate to the old tapered annual allowance of £10,000. 
 
Unused annual allowances continue to be carried forward on a rolling basis for 3 years. 
 
State pension 
 
Men and Women aged over 66 will qualify. 
From 6 April 2021 basic increased from £137.60 to £141.85 per week 
Full state pension increased from £179.60 to £185.15 per week 
 
State pension entitlement 
 
How to qualify 
 
You usually need at least 10 qualifying years on your National Insurance record to get any state pension. 
 
You will need 35 qualifying years to get the full State Pension if you did not make NI contributions before 6 April 2016. 
 
If you made NI contributions before 6 April 2016 then what you will actually receive is based on your National Insurance record. 
 
How it’s calculated 
 
Your NI record before 6 April 2016 is used to calculate your ‘starting amount’ and this is the higher of: 
 
The amount you would get under old State Pension. 
The amount you would get if new State Pension had been in place at the start of your life. 
 
- If starting amount > full State Pension then the excess is called your ‘protected payment’ and this is paid on top of full new State Pension. 
 
- If starting amount < full State Pension you can get more by adding more qualifying years to your NI record. You can do this until full State Pension is reached or you reach State Pension age – whichever is first. 
 
- Each additional qualifying year adds (£185.15 / 35 * qualifying years after 5 April 2016) per week. 
 
If you have any queries about your Pension allowances please contact us here
 
 
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