How much state pension will I get at 66? | Born in 1956, 1957, 1958

When can I retire if I was born in 1956? If you were born in 1956 as a UK citizen, you can retire and qualify for the State Pension when you’re over age 66, but by taking control of your pension savings early enough, you might not have to wait for the State Pension to retire.

Knowing when you qualify for the State Pension can help you plan your financial future and achieve a better quality of life in retirement.

Yet complicated pension rules are vulnerable to change, so it can be difficult to keep up with the evolving landscape. Not knowing something as simple as when you qualify can disrupt your retirement savings plans, impact how much you have for retirement, or even delay when you hang up your working boots.

Currently, most people don’t have to reach retirement age to access their pension funds. Instead, they can access their pension savings from the age of 55. You can then decide to take a 25% tax-free lump sum or keep it invested in the market. Whilst many would like to retire at the age of 55, an additional 10 years of saving into your pension could make a real difference to your quality of life when you retire.

What is state pension, and how does it work?

The State Pension in the UK is a regular payment from the government that most people can claim in when they reach the State Pension age. It is a type of financial assistance intended to give retirees a minimal level of income. It is a flat-rate pension, which means that everyone who qualifies gets the same amount of State Pension, regardless of their income or how much they have saved.

The current State Pension age is 66 for both men and women. To qualify for the UK State Pension, you must:

• Be a UK resident.
• Reach the State Pension age.
• Have a certain number of qualifying years based on your National Insurance record.

The number of qualifying years required depends on an individual’s year of birth and when they reached the State Pension age. For example, if you were born on or after 6 April 1951, you will need 35 qualifying years. If you do not have enough qualifying years, you may still be able to get some State Pension amount.

Also, whether you get the basic State Pension, or the full State Pension depends on when you were born and how many qualifying years of National Insurance you have. The full new State Pension for 2023/24 is £203.85 per week, while the full basic State Pension for 2023/24 is £156.20 per week.

The State Pension age has been transformed since 2010, when people widely accepted that men would retire later than women. This has been reformed, with the female State Pension age rising to 65 from 2010-2018, and then 66, 67 and 68 for both men and women.

Two months before you reach State Pension age, you’ll get a letter telling you what to do. At this point, you can decide to either take your State Pension or delay it.

By deferring your State Pension, you could increase the amount you get as a weekly income when you come to claim it. The extra amount is paid with your regular State Pension payment.

As long as you defer for at least nine weeks, your State Pension will increase each week you defer. So, for every nine weeks you defer, your State Pension increases by the equivalent of 1%. This works out to just under 5.8% every full year.

The State Pension is undoubtedly an excellent supplement to the retirement income you generate from a personal pension, but it’s important you ask yourself whether you can comfortably rely on this during retirement.

How is the new state pension calculated?

The new State Pension, which was introduced on April 6, 2016, is calculated based on the number of qualifying years you have on your National Insurance record. A qualifying year is a year in which you have paid or been credited with National Insurance contributions. If you are wondering, “How much state pension will I get at 66?”, the amount of State Pension you will get depends on how many NI qualifying years you have.

The full new State Pension for 2023/24 is £203.85 weekly. To calculate your new State Pension, you will need to divide the full new State Pension by 35 and then multiply by the number of qualifying years you have. For example, if you have 20 qualifying years, you will get 57.41% of the full new State Pension, which is £116.48 per week.

The new State Pension is subject to change based on a yearly government review.

How Many Years of National Insurance Contributions do you need to qualify for the full new state pension?

You need at least 10 qualifying years of National Insurance contributions to qualify for the full new State Pension. The 10 years do not have to be accumulated consecutively. For a man to qualify for the new State Pension, he must be born on or after 6 April 1951, while a woman must be born on or after 6 April 1953. To get the full new State Pension, you need 35 qualifying years. If you have less than 35 qualifying years, you will get a proportion of the full amount.

When will I get my State Pension?

The State Pension is different to personal or workplace pensions. Once you hit the State Pension age, the government will pay you a regular income throughout your retirement – as long as you’ve built up the required number of years of National Insurance contributions.

You can use the tool on the government website to check when you’ll reach the State Pension age, your pension credit qualifying age and when you’ll be eligible for your free bus pass.

Born in 1956: When can I retire in the UK?

You can retire at any time if you were born in 1956. However, people born in 1956 will be able to claim their State Pension at age 66. If you were born on 1 July 1956, your State Pension age is 66 years. This means you’ll be eligible for your State Pension on 1 July 2022.

Born in 1957: When can I retire in the UK?

You can retire at any time if you were born in 1957. However, if you were born in 1957, you will be able to claim your State Pension at age 66. If you were born on 15 October 1957, you will be able to claim your State Pension from 15 October 2023.

Born in 1958: When can I retire in the UK?

People born in 1958 can claim their State Pension at age 66. If you were born on 07 January 1957, you will be able to claim your State Pension from 07 January 2024.

Before the next increase (in 2028), those born between 1957 and 1960 will be eligible for retirement (claim State Pension).

The State Pension age is gradually increasing for people born after 1950 and is scheduled to rise to 67 between 2026 and 2028. This is because the government is trying to make sure that the State Pension is sustainable in the long term.

When will the state pension age rise to 67?

The government, via the Pension Act of 2014, has decided to bring forward the increase in state pension age by eight years.

The state pension age for men and women born on or after 6 April 1960 will increase from 66 to 67 between 2026 and 2028. Therefore, if you were born after April 1960, you would start receiving your state pension in April 2027. People born from 1961 will reach the retirement age of 67 in 2028.

When can I retire if I was born in 1956 and get my state pension if the state pension age changes to 67? Well, you will receive your pension when you reach retirement age in 2022 at the age of 66; the changes in state pension will not affect you.

When will the state pension age rise to 68?

Currently, under the Pensions Act 2007, men and women born on or after 6 April 1977 will have their state pension age increased from 67 to 68 between 2044 and 2046.

In July 2017, the government announced that further state pension review, which will occur in 2023, will determine if the UK government will increase the state pension age from 67 to 68 by seven years. If the legislation moves the date forward, the new dates will be between 2037 and 2039.

If the date is brought forward, this would mean that the state pension age for men and women born between 6 April 1970 and 5 April 1978 can be 68, as it all depends on their date of birth. Those born between 1962 and 1976 will reach the retirement age of 67 before the next projected State Pension increase in 2044.

Difference between old and new state pensions?

The old state pension and the new state pension are two different systems of state-provided retirement benefits in the UK. There are some of the differences between the old and new state pension in the UK.

Qualifying Years: To qualify for the old State Pension, you must have at least 30 qualifying years of National Insurance contributions to receive the full state pension. For the new State Pension, you need to have at least 10 qualifying years to be eligible and 35 qualifying years of National Insurance contributions to receive the full state pension.

Pension Amount: The maximum amount for the new State pension is more than the maximum for the old State Pension, and the new State Pension provides a higher flat-rate amount for those who meet the minimum qualifying years. However, the amount under both systems relies on an individual’s National Insurance record.

Pension Calculations: The old State Pension calculation was based on the National Insurance contributions and additional State Pension based on your earnings (additional means-tested benefits). In contrast, the new State Pension calculation process uses a single-tier pension based on an individual’s National Insurance record.

Additional Pension: Under the old state pension, individuals had the opportunity to build up additional State Pensions through schemes like SERPS or S2P, which were earnings-related. In contrast, the new state pension consolidates these additional pensions into a single-tier system, streamlining the process.

Regular investment plans for investors

The two golden rules of saving for retirement are starting as early as possible and saving as much as you can. But when navigating through retirement planning, how do you know if you’re doing enough to be on track to have the retirement you want?

Let’s examine three regular investment plans to help investors understand whether they’re on track to get their desired retirement income. These savings plans of £400 a month, £800 a month and £1,600 a month, net of tax relief or employer contributions, fall well within the top annual allowance threshold and represent contribution levels reflective of different life stages.

Some corporate schemes offer generous top-ups to pension contributions, and it may be worth taking advantage of these first.

As you get older, your priorities change, and some of your big outgoings will stop – you’ll pay your mortgage off, and your children will become more independent. You should look to put as much of this extra cash into your pension to boost your retirement income.

By setting aside this much each month, you could be on track to a comfortable retirement income in less time than you think.

According to the FCA, it’s reasonable to expect that you can earn an annualised return of at least 5% from a balanced and diversified portfolio over the long term. If you assume 5% is your return, you can then withdraw 5% from your pension each year. So theoretically, you’ll never deplete the nominal value of your pension.

That means that for an annual income of £25,000, you’ll need a pension pot worth £500,000. For £37,500 a year, you’ll need £750,000.

Understanding the Impact of Brexit on State Pension in the UK

Brexit has been a topic of significant concern for many UK citizens, especially those nearing retirement age. One question that often arises is, “When can I retire if I was born in 1956?”.

While the State Pension age remains at 66, Brexit has introduced some uncertainties that could affect your retirement plans.

Firstly, Brexit has led to fluctuations in the value of the pound, which could impact the real value of your State Pension over time. If you’re considering retiring abroad, especially in an EU country, the exchange rate could affect how much you receive in local currency.

Secondly, the UK’s exit from the EU has raised questions about the “triple lock” guarantee. This mechanism ensures that the State Pension rises by the highest of three measures: inflation, average earnings, or a minimum of 2.5%. While the government has committed to maintaining the triple lock, economic pressures resulting from Brexit could put it under review.

Lastly, if you’ve worked in other EU countries, Brexit could affect how those years are counted towards your UK State Pension. Prior to Brexit, years worked in the EU were aggregated with UK National Insurance contributions to calculate your State Pension. However, the rules have changed, and it’s crucial to check how this might affect your entitlement. It’s essential to stay updated and possibly consult a financial advisor to understand how Brexit could impact your retirement plans.

How to plan for retirement

By taking control of your pension savings plan early enough, you can have more flexibility over when you retire. Follow these four simple steps and get a step closer to getting the retirement you deserve.

• Get cost-efficient investment advice – Building the right portfolio that reflects your goals, financial background, and appetite for risk can be challenging. Cost-efficient investment advice can help you make the right financial decisions for your future.
• Invest in a pension that changes to reflect you – Priorities change over time, and your investments must reflect that change. At Moneyfarm, we regularly run our suitability algorithms to ensure your investments put you in the best position for success. If they don’t, we’ll match you with the portfolio that does. This is all free of charge and part of our ongoing commitment to help you reach your goals.
• Consolidate your pensions – It can be difficult to manage several different pensions. By transferring old pensions into one place, you can lower costs and comprehend what you have. By knowing the value of your pension, you can make the necessary adjustments to reach your goals.
• Make the most of generous tax benefits – Basic tax relief means that most people get a 25% top-up to each contribution they make from the government. The tax relief system encourages Brits to save for their future, providing basic rate taxpayers with 20% tax relief, higher rate taxpayers with 40%, and additional rate taxpayers with 45% tax relief. If you fall in the higher or additional bucket, make sure you apply for further relief through HMRC to make the most of your money.

Our free Pension Drawdown Service helps you make confident, stress-free decisions to stay in control of your retirement income.

You can use Moneyfarm’s Pension Calculator to help you work out how much you need to be saving a month to get the income you want in retirement or start one of Moneyfarm’s regular investment plans.

Making sure you plan for retirement in the best way for you and your family can be difficult. If you need any help, talk to an independent financial adviser and be sure to read our pension guide.

Supplement your retirement income with a stocks and shares ISA

If, having used our pension calculator and the answer to the question, “How much state pension will I get at 66?” doesn’t look like it will be enough, even with a SIPP or workplace pension added, you might want to consider your options. The problem is that the taxman will take his share, so consider opening a stocks and shares ISA. These are tax wrappers, and any income you receive from one will be completely tax-free.

With private pensions (including workplace pensions), you can save up to £60,000 per annum tax-free. This might sound like a lot of money if you are in the upper earnings bracket. But once the taxman has claimed 40% or 45% of any income in your retirement, if you’re a higher or additional rate taxpayer, you will be saying goodbye to a huge chunk of your retirement income.

If, however, you put up to £20,000 per annum into a stocks and shares ISA, with luck, your fund will grow thanks to compound interest, and any earnings you make from share dividends or any withdrawals you make will be tax-free.

Even if you are not a high earner, consider this tax-free income option as part of your retirement income plan.

FAQ

How long after my 66th birthday will I get my State Pension?

After claiming your State Pension, the first payment will usually be within five weeks, and you will receive the full payment every four weeks after that.

Can I retire at 60 and claim State Pension in the UK?

No, you can only claim your State Pension when you reach the State Pension Age.

When can I retire if I was born in 1956?

You can retire at any time if you are born in 1956, but to qualify for the State Pension, you must be over age 66.