In December 1942, at the request of the
government, Sir William Beveridge produced a
report proposing that
all people of working age should
contributions which would benefit those who
retired, sick, unemployed or widowed.
The hope was that this system would
minimum living standard 'below which no-one
should be allowed to fall'.
Almost 70 years later, sadly nobody can argue
that anything resembling Beveridge's hope has been fully
Since the inception of the state pension system
it has been reformed and reneged on many times.
At present there are two essentially unfunded
state schemes, one providing a contribution-based Basic State
Pension (BSP) and an additional scheme providing
earnings-related pensions (formerly SERPS and now S2P). These
two state schemes are highly insecure, being unfunded and
subject to retrospective as well as prospective cuts.
The history of both is littered with broken
promises: According to official statistics the Basic State
Pension (BSP) is more than 20 per cent down from its 1950 level
relative to earnings and the earnings link was broken for both
past and future years of service in 1980 which has lead to a
further slide in the value of the BSP.
At the same time, and partly as a result, 60% of
pensioners are currently relying on means-tested benefits,
including housing-related benefits, with 45% eligible for the
Pension Credit alone (based on 2011 data from UK National
Statistics; Office for National Statistics, (ONS)).
State Pension as part of your retirement plan.
you claim your State Pension, it gives you a regular income for
the rest of your life. It can give you a reliable foundation for
your income in retirement, although it might not be enough to
support the lifestyle you want.
So you may
decide you want to save for yourself on top of what the State
If you want
to make a plan for your retirement, it is worth knowing what
sort of State Pension you may become entitled to.
is your State Pension?
Pension is made up of two parts, the basic State Pension and the
additional State Pension. Different people get different amounts
of State Pension you get depends on how many qualifying years of
National Insurance you have.
In 2014-15, a single person can get up to £113.75
a week basic
State Pension, though some people get less than this.
get more than this amount, because they also get an additional
addition, there are a significant number of means-tested and
non-means tested benefits which can be applied for depending on
each individuals' personal circumstances.
how can you claim your State Pension?
claim your State Pension once you reach your State Pension age.
You do not have to claim it straight away. If you put off
getting it you may be able to increase the amount you get.
before you reach State Pension age, The Pension Service will
write to you. The letter will tell you if you need to
claim your State Pension. If you are getting certain social
security benefits you may not need to claim.
little doubt that the State Pension is essential for many in
avoiding abject poverty in retirement and for others it may be
more of a welcome addition to other pension benefits.
For all the
good intentions behind the State Pension it remains a fact that
UK state pension now is amongst the lowest in Europe and anybody
relying on it as their only source of income could be facing
some very bleak final years.