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State Pension

  • The eligibility has changed for those individuals who reach State Pension age (SPA) on or after 6 April 2016
  • Individuals who reached their SPAs before 6 April 2016 receive State Pension benefits based on the rules that existed prior to 6 April 2016, as shown in the table below.
  • On 6 April 2016, the new State Pension came into force which is also known as the ‘single-tier’ State Pension.
  • Existing benefits accrued under the earnings related parts of the State Pension will be accounted for in calculating an individual’s entitlement, to ensure that no-one is worse off under the new system.
  • In addition, any periods when the individual was contracted out under the pre-2016 rules will be taken into account.

Question - Use Your Note Taker To Jot Down Ideas / Calculations

Paul reached his State Pension age in March 2016. He had always been self-employed. Which State Pensions, if any, did Paul build up an entitlement to?

a) No State Pensions.

b) Basic State Pension only.

c) Basic State Pension and SERPS only.

d) Basic State Pension, SERPS and the S2P

B)

Since Paul has always been self-employed, he has only built up an entitlement to the Basic State Pension.