After years of work the time to retire is approaching, but you are not sure of the minimum age required and do not know how much the monthly cheque will be?
The United Kingdom offers various possibilities for those who are about to retire, either through the traditional State pension, or through other schemes that must, however, be evaluated in advance.
Those who wish to increase their basic pension may consider setting up a personal pension, while employees have the option of obtaining a workplace pension. As a matter of fact, every employer is required to open a pension position for its employees who, if they change jobs frequently, may find themselves with various types of small pension pots over time.
In general, those who have taken out a personal or workplace pension do not have to wait until retirement age to be able to access the funds paid in but can do so several years in advance.
Retirement age and State pension
In the UK, the current average age of eligibility for the state pension is 66, regardless of the sex of the worker claiming it.
Depending on the year of birth, it is possible to get either the basic or the new State pension; in particular, men born before 6 April 1951 and women born before 6 April 1953 are entitled to the basic pension, while all others are eligible for the new one.
The difference between the two does not concern either age or pension record, which must always be at least 10 years, but the amount the retiree will receive monthly.
How much State pension
The amount of the monthly cheque varies according to both the number of years on the social security record and the type of pension that can be claimed.
The full basic pension, which is granted to those with at least 30 years of contributions, allows them to receive a weekly amount of £ 141.85 per week, while the new pension, which requires 35 years of contributions to obtain the full amount, is £ 185.15 per week.
Those who have reached the minimum retirement age but have a minimum number of contribution years will receive a lower sum.
National Insurance record
To qualify for the State pension, you must have at least 10 qualifying years, even if not consecutive, on your social security record. In addition to labour or voluntary contributions made to the social security system, social security credits received from the unemployed and persons in need also contribute to the number of qualifying years.
Workplace and private pensions
Anyone who does not want to wait until the age of 66 to retire, but also anyone who wants to maintain a high standard of living, can open a personal pension, which is available in three main types: SIPP, standard and stakeholder.
This type of pension plan can be classified in the investment category, as the contributions paid are used to buy securities, funds, and shares.
While personal pensions are accessible to everyone, from employed to unemployed, including housewives and freelancers, workplace pension is designed for employees only, as they must be activated by the employer when hiring a new worker.
Each type of private and workplace pension has different characteristics, but in most cases, they allow access to savings as early as age 55, thus enabling those who wish to do so to retire a few years earlier.
As for the sums received, these will largely depend on the contributions paid and on how the investment have performed.