Content Tagged with UK
Nearly one in four (24%) of those aged 40 to 75 do not have a private pension, according to the Department for Work and Pensions (DWP)
The Planning and Preparing for Later Life survey found that while most people had started saving for retirement, 24% of 40-75 year olds did not have a private pension, and 16% had not yet started saving.
Only 23% had an idea of the amount they would need to save for retirement, with the majority unsure.
People on lower incomes were less likely to have started saving for retirement. Around 32% of those with incomes of less than £10,500 had not yet started saving compared to just 1% of those with incomes of £44,000 or more.
People with higher incomes were more likely to expect to retire before the current state pension age (SPa), which is 65. For example, 54% of those with gross earnings of £44,000 a year or more expected to retire before the current Spa compared with only 36% of those earning below £10,500.
Similarly, people with savings over £100,000 were more likely to expect to retire before the Spa (15%) than those with no savings or those with savings under £15,000 (34%).
The survey provided evidence on how far individuals can make well-informed decisions about how and when to retire and whether they will be in a position to enjoy financial security when they do.
Many respondents reported being unable to afford to make contributions to their pension, with 53% currently without one.
In response to the data, the DWP said: ‘The question of whether and how people are planning for retirement is becoming ever more important as people live longer and have greater freedom over when and how they retire and take their pensions.’
Most people had made at least some provision for ensuring they have an income in retirement, with 63% having started saving by their 30s. Around three in four (76%) of 40 to 75 year olds had a private pension.
However, those currently on low incomes are likely to be particularly financially vulnerable in retirement, often requiring further support.
Not being able to afford to make contributions was the most common reason for not having a pension.
Those who had not yet retired (62%) expected to continue in paid work beyond their ideal retirement age. Currently, 14% of respondents aged 66 to 70 remain in employment and 5% of those are over 70.
Factors to help them work longer included flexible working and the potential to work fewer hours as they approach retirement.
Self-employed respondents stated they were less likely to save for retirement (65%), expecting to retire later than those in employment.
Reasons for this included financial security and enjoying the flexibility their self-employment afforded.
Around one in 10 (11%) respondents were currently self-employed in some capacity and as many as 29% had experienced a period of self-employment at some point in their career.
The research was commissioned by the DWP and was carried out by the National Centre for Social Research (NatCen). Data was collected from 2,655 40 to 75 year olds across the UK between November 2020 and February 2021.
For more information, the DWP Planning and Preparing for Later Life report can be found here.
Please contact AKEPB if you wish to seek further assistance or attend AKEPB virtual clinic every Monday from 8:15pm to 9:00pm for a private and confidential consultation.
AKEPB UK Personal Meeting (Zoom) ID - 813 899 6436
CAUTION: The above-mentioned write-up is extracted from various professional journals and articles including HMRC guidance notes where relevant.
Changes to state pensions from April 2023
The government is making a series of changes to the state pension next month.
As well as reinstating the triple lock, there will be changes to a range of pensioner payments. The government is also looking closely at raising the state pension age, which is due to be announced in the coming months. Meanwhile, there are just a few weeks to go to buy National Insurance credits to boost your state pension, although the Department for Work and Pensions (DWP) has said there may be some flexibility with the 6 April deadline, due to high demand.
Set out below are the changes you need to know about that will kick in on 6 April, whether you have yet to reach state pension age, started claiming your pension recently, or have been receiving it for years already.
New state pension
Those receiving the new state pension will get a boost in the new tax year, with a 10.1% rise in their payment. This is due to the return of the triple lock, which was temporarily suspended last year. The triple lock ensures the state pension rises by whichever is highest: 2.5%, inflation or average earnings. This year, the pay-out is going up with inflation, which has been running at a 40-year high. The full new state pension is currently worth £185.15 a week, and this will rise to £203.85 on 6 April. This is the biggest-ever increase to the state pension.
People are eligible for this type of state pension if they are a woman born on or after 6 April 1953, or a man born on or after 6 April 1951.
So, if you have not reached state pension age yet, you’ll be entitled to the new state pension when you come to retire. However, you must have at least 10 qualifying years of National Insurance contributions to be eligible - rising to 35 years for those who want to secure the full amount.
Basic state pension
If you retired before April 2016, you may be receiving the basic state pension. This is an older-style pension that the government pays to men born before 6 April 1951 and women born before 6 April 1953.
The full basic state pension is £141.85 a week, and this will rise to £156.20 a week, thanks to the triple lock.
Married woman’s pension
The next change relates to the married woman’s pension, a type of basic state pension. Under the old system, women could derive payments from their spouse or civil partner’s National Insurance contributions. The sum is worth 60% of the basic state pension rate.
It goes up every April in parallel with the basic state pension. This means it will rise from £85 a week to £93.60 next month.
Over 80 pension
As the name suggests, this is a state payment for people aged 80 or over. To qualify, they must either get a basic state pension of less than £85 a week, or no state pension at all.
It’s currently worth £85 a week. For the 2023/24 tax year, the amount will rise to £93.60 a week.
Additional state pension
The additional state pension (also known as the second state pension or SERPs) is also protected by the triple lock, and will increase by 10.1% on 6 April 2023. It is a top-up that you could get in addition to the basic state pension.
How much a person gets from the additional state pension usually depends on how long they paid National Insurance for, their earnings and whether or not they were contracted out. It’s also possible to inherit additional state pension from your partner.
The maximum sum people can receive will increase from £185.90 a week to £204.68 a week.
To find out how other government benefits will change on 6 April, check out this useful list on the government website Benefit and pension rates 2023 to 2024 - GOV.UK (www.gov.uk)
Please contact AKEPB if you wish to seek further assistance or attend AKEPB virtual clinic every Monday from 8:15pm to 9:00pm for a private and confidential consultation.
AKEPB UK Personal Meeting (Zoom) ID - 813 899 6436
CAUTION: The above-mentioned write-up is extracted from various professional journals and articles including HMRC guidance notes and MoneyWeek where relevant.
23rd March 2023 – Ismaili Centre London
The President of the Ismaili National Council, Naushad Jivraj welcomed Mrs Akshata Murty (British Prime Minister, Rishi Sunak’s wife) to the Ismaili Centre, London. Mrs Murty was attending an Iftar High Tea at the Ismaili Centre, London being held on the first day of Ramadan. Mrs Murty was given a tour of the Ismaili Centre, London which was opened by the Rt Honourable Margaret Thatcher on 24th April 1985. Mrs Murty met a cross section of the Ismaili Community and Ismaili Community leaders from across the UK. Prayers were offered at Iftar and Mrs Murty joined the community in breaking fast.
President Jivraj noted how happy he was to start the Holy month of Ramadan with an Iftar High Tea to welcome Mrs Murty to the Ismaili Centre. In his welcome address, President Naushad commented ‘The Ismaili Muslim Community acknowledges the esteemed and unparalleled service of a Prime Minister’s Family...and commitment to the nation and the British people.’ He went on to say ‘The Ismaili Community also adhere strongly to the notion that voluntarily giving our time and knowledge in service to others is synonymous to faith... on behalf of the UK Shia Ismaili Muslim community, we have pledged 100,000 hours of voluntary service to Britain and the British people; in an endeavour to improve the quality of life of the communities in which we live.’
Chancellor Jeremy Hunt delivered a ‘Budget for Growth’ after the Office for Budget Responsibility forecast a stronger than expected performance from the UK economy this year with inflation continuing to fall.
Earlier today, Prince Rahim attended the Commonwealth Day Service of Celebration, in the presence of His Majesty The King, Head of the Commonwealth, at Westminster Abbey in London, England.
In recognition of his contribution to the University of London’s School of Oriental and African Studies (SOAS), Professor Dr Farouk Mohamedhusein Tharia Topan was recently awarded an Honorary Fellowship at SOAS, where he worked from 1993 until his retirement in 2006. In a wide-ranging interview with The Ismaili, Dr Topan reflects on his life in teaching, academia, and service to the Jamat.
Today, the UN celebrates International Day of Education. The theme this year is “to invest in people, prioritise education.” Investing in teachers is an intended product of the Professional Teachers Collaboration, an initiative whose primary focus is the international exchange of best practices in teaching.
Prince Rahim attended a special event in London on 18 January to honour the contributions of Dr Farhad Daftary to The Institute of Ismaili Studies, and more broadly to the fields of Ismaili and Islamic studies, as he steps down from his management roles at The Institute.
The Jamat across the German, Sweden, and United Kingdom jurisdictions came together to celebrate our Beloved Hazir Imam's 86th birthday. Celebrations included cake cutting, refreshments,mehendi application, ginan mehfil and variety performances by all members of the jamat.
We have reached a point in time where inflation is high, interest rates are relatively low (although rising), and generous occupational pensions are a thing of the past.
Over 8 million households are set to receive an additional £324 as part of the government’s Cost of Living support package.
Employees will see a cut in their National Insurance contributions this month following the reversal of the rise in National Insurance announced in April.
More than half of landlords are not aware of the new rules under Making Tax Digital for Income Tax which will require quarterly reporting on property income.
Buy to let landlords are being contacted by HMRC in its latest nudge campaign, which identifies people who may not be declaring their full rental income.
