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The State Pension

If you've not enrolled in a personal, stakeholder or company pension plan, it's very likely that you will only receive the State Pension when you retire. The State Pension is provided by the Government to make sure that you have some form of income for your retirement. It is basically made up of the National Insurance contributions that you have made throughout your working life.

Because people are living longer in the UK, the retirement age is due to increase for many of us in the near future. There are different elements relating to the State Pension. In most cases people will find that they will qualify for the Basic State Pension. However if a person has not made the required National Insurance contributions throughout their working life, then they may not qualify. In this case it is likely that they may have to rely on a partner’s contributions in order to receive a basic pension of their own.

As useful and crucial as the Basic State Pension is with regards to providing an income to help with everyday living costs, surviving solely on this is extremely difficult. The rising cost of everyday living means pensioners experience difficulties sustaining a proper lifestyle. Currently the amount that the basic state pension provides per week is £107.45. While this has risen in line with the Retail Prices index (RPI), it has never been an amount that has allowed those solely receiving it to live a particularly comfortable lifestyle.

It is also possible to qualify for the State Second Pension, or S2P. This is an earnings related pension paid in addition to the Basic State Pension that depends on how much Class 1 National Insurance contributions you've made. The S2P does not apply to people who are, or were, solely self employed.
And for those of you who decide to retire to sunnier climes in your retirement, you'll be pleased to hear that your State Pension could still be paid to you depending on which country you move to. If it's a European Economic Area (EEA) country, then there'll be no issues. Check the website for more details.

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