State pension payments do not usually come automatically when a person reaches the appropriate age, it will be necessary to claim. In addition, those who are able will receive state pension payments on top of their employment income.
There is nothing stopping people from claiming a state pension while working which will obviously increase a person’s income in the years to come.
It should be noted that state pensions can be affected by how a person works before they claim, when they start receiving state pensions but the income from it will not be affected by wages.
The amount of money a person earns and the hours they work will not affect the amount of state pension, but the claimant will have to pay tax on their income in addition to state pension.
The fact that people stop paying national insurance when they reach the state pension age should be offset, at least to some extent.
Read more: Pension: Tax relief measures should be taken along with HM treasury planning ‘
People will receive a letter from the government two months before they reach their state pension age and be guided on what to do.
However, even if a person does not receive the letter, they can still claim it if they are within four months of reaching the age of their state pension.
The government provides details about the fastest way to claim a state pension, but it can also be claimed by phone or post.
There will be a slightly different process for those claiming the Isle of Man pension.
These changes happen frequently so it is difficult to know exactly when retirement is possible.
Fortunately, the government provides free tools on their websites that will allow people to verify:
- When they reach the age of their state pension
- When they reach the age of eligibility for their pension credit
- When they will be eligible for free bus travel