State pension for Women born in the 1970s

Yes, the state pension goal posts for women born in the 1970’s might keep moving, and yes it might be later than you want it to be. But don’t ignore it! We start here because it’s going to feel good to know that you’ve got something already ‘banked’ for retirement. The state pension is based on your national insurance history.

You can find your state pension forecast here.

Or you can use this form BR19 form.

It usually takes about 10 days.

When you login, you will see a big green box with the date you will receive your pension and how much it will be.

Over £9,000 a year, nice! But lets look at those bullet points under the big green box.

The current law bit is important. Acts passed in parliament can change the state pension age. We need to accept the state pension age is going to keep creeping up. Why? We are an aging population who are living longer. Extending the age, whilst not popular, is a way to try and make the state pension affordable.

Although the green box says I’ll get my state pension in 2041, I probably won’t.

The age was due to change to 68 between 2044 and 2046. But the government plan to bring it forward to 2037 and 2039. It needs to be approved by parliament, once it has been, it will become law.

Born in the 70s? Here’s how these changes affect you:

• If you were born before 5th April 1970, great news, you will still get your state pension at age 67
• Born between 5th April 1970 and 5th April 1978? You need to wait anywhere from 67 and 1 month to 68, depending on when your birthday is.
• Born after 6th April 1978 you already had a state pension age of 68.

It can be easy to feel disillusioned by what seem like arbitrary changes. The government have to review the pension age periodically (next review is due May 2023). And under current legislation, you generally get at least 10 years notice of any changes.

So while the timeline might shift a little, lets concentrate on the money. Because the next bullet point about inflation looks innocuous, but it’s a biggie! That little sentence could double your money. We’ll get to that in step 3.

The next section you will see is the Estimate & Forecast. The estimate is what you’ve already got. The forecast is what you could get if you carry on paying national insurance.

You’ll see a link to view your national insurance record. This shows you if there were years when you didn’t make full contributions. To max out the state pension, you need 35 years of national insurance contributions.

Do you have missing years?

Sometimes we miss years because we were working abroad, or self-employed…

You can “buy” missing years. If you are an employee, you buy extra Class 3 National Insurance contributions. If you are self-employed, you want to buy Class 2 National Insurance contributions.

If you have gaps in your national insurance history because you were raising a family, you may be able to claim National Insurance Credits. You can find out more about that here.

What does buying extra years look like?

If you wanted to buy this year’s Class 3 contributions, it would cost £880.80. What would that get you? You would get an extra £266.83 per year state pension.

Assuming you live more than 3 and a half years into retirement, you will have made your money back. Everything after that is profit! Average life expectancy at retirement today is another 20 years. And remember, the state pension increases each year.

ACTIONS:

• Get your state pension forecast
• Check if you have any missing years and considering buying extra contributions
• Write the forecasted pension on a post-it note.

If you’re looking at pension or retirement planning then why not book a clarity call with me – HERE