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Pensions glossary

State Pension

The state pension is a government-run pension based on the number of ‘qualifying years’ someone has chalked up.

The basic state pension can be claimed from state pension age onwards - currently 65 for men and 60 for women, but will increase to 65 for women between 2010 and 2020. 'Qualifying years' for the state pension age are tax years in which a person has paid or is treated as having paid or been credited with national insurance contributions.

In 2006/07 the full basic state pension is £84.25 per week - assuming a person has qualifying years covering 90 per cent of their working life (i.e. 16 until state pension age). Persons who do not qualify for the full basic state pension, but have 25 per cent or more of the qualifying years, will receive a basic state pension between the minimum (£21.06) and the maximum (£84.25) weekly amounts.

A 'non-contributory' or 'over 80 pension' is available to people aged over 80, regardless of 'qualifying years'. This is currently £50.50. Additionally, for over-60s living in Britain, the government offers pension credit to top up weekly income to £114.05 for single pensioners and £174.05 for pensioner couples. It is possible to delay claiming a state pension, such that when it is finally claimed a person receives a higher weekly amount or a one-off taxable lump sum.


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