PENSIONERS who are turning 80 this year could get a boost to their state pension worth thousands of pounds a year.
The over-80s pension boosts the income of retirees to £101.55 a week, or £5,280.60 a year.
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It’s available for people who receive less than the full state pension or those who earn no state pension at all.
The scheme only applies to men born before April 6, 1951 and women born before April 6, 1953.
Anyone born after those dates is under the new state pension system, which has different rules.
How does the old state pension work?
The old state pension is worth up to £169.50 per week (£8,814 a year), but to get the full amount you need to have enough qualifying years of National Insurance Payments.
How many years you need depends on when you were born.
Men born between 1945 and 1951 need 30 qualifying years to get the full amount and one year to get any state pension at all.
If they were born before that, they need 44 qualifying years for the full state pension and 11 years to get any money.
Women need 30 qualifying years to get the full old state pension if they were born between 1950 and 1953, but 39 qualifying years if born earlier. To get any pension they need one or ten years respectively.
A qualifying year counts if, in that year, one or more of the following applied:
- you were working and paying National Insurance
- you got National Insurance Credits, for example, you were unemployed, sick, or a parent or carer
- you paid voluntary National Insurance contributions
The basic State Pension increases every year by whichever is the highest of the earnings, prices as measured by the Consumer Prices Index (CPI), and 2.5%.
How does the over-80s pension top-up work and who gets it?
People who have enough years to qualify for the basic state pension, but not enough for the full amount will get lower weekly payments.
Once you turn 80, if the amount you earned was less than £101.55 a week, the over-80s pension will top your income up to that amount.
How much you’ll get depends on how much basic State Pension you get, if any.
For example, if you’re 80 years old and you get £43 a week basic State Pension, your basic State Pension may be topped up by £58.55 to £101.55 a week.
If you receive no basic state pension, you should get the full £101.55 a week, which adds up to £5,280.60 a year.
You cannot get the over-80s pension if you reached State Pension age on or after 6 April 2016, as you will be under the new state pension regime.
Your eligibility for the over-80 pension is not based on National Insurance contributions, but there are other criteria you need to meet to be eligible for the bonus cash.
For instance, you need to have been resident in the UK for at least 10 years out of 20 before you turned 80.
This does not have to be 10 years in a row, but the period must include the day before you turn 80 or any day after that.
You also need to have been ‘ordinarily resident’ in the UK, the Isle of Man or Gibraltar on your 80th birthday or the date you made the claim for this pension.
Age UK says that ‘ordinary residence’ refers to the place you normally live.
Gov.uk adds that a person is ordinarily resident if they are living in the United Kingdom, lawfully, voluntarily, and for settled purposes as part of the regular order of their life for the time being, whether for a long or short duration.
It also adds a list of questions that authorities might consider to determine whether someone has an ordinary residence.
These include things like:
- Whether the person has been in the UK for the last six months or more
- Whether they intend to remain for six months
- Whether the stay is one of several regular or significant stays
- Whether their housing situation is stable
- Whether they can show they pay utilities or council tax
- Plus questions around employment, schools for children, and residence of close family
It’s worth noting that the over-80s pension counts towards your taxable income, so it could affect your other benefits.
You need to include the money if you’re asked for your income when making other benefits claims.
How to claim the over-80s pension
The earliest you can claim is three months before your 80th birthday.
To put in a claim, you can ask for a form from either your local Jobcentre Plus or the Pension Service.
You can contact the Pension Service on 0800 731 7898, by phone on 0800 731 7339, or use Relay UK on 18001 then 0800 731 7898.
If your circumstances change, you need to tell the Pension Service, using the numbers above.
You can also get in touch if you have any questions about the pension top-up.
What are the different types of pensions?
WE round-up the main types of pension and how they differ:
- Personal pension or self-invested personal pension (SIPP) – This is probably the most flexible type of pension as you can choose your own provider and how much you invest.
- Workplace pension – The Government has made it compulsory for employers to automatically enrol you in your workplace pension unless you opt out.
These so-called defined contribution (DC) pensions are usually chosen by your employer and you won’t be able to change it. Minimum contributions are 8%, with employees paying 5% (1% in tax relief) and employers contributing 3%. - Final salary pension – This is also a workplace pension but here, what you get in retirement is decided based on your salary, and you’ll be paid a set amount each year upon retiring. It’s often referred to as a gold-plated pension or a defined benefit (DB) pension. But they’re not typically offered by employers anymore.
- New state pension – This is what the state pays to those who reach state pension age after April 6 2016. The maximum payout is £203.85 a week and you’ll need 35 years of National Insurance contributions to get this. You also need at least ten years’ worth to qualify for anything at all.
- Basic state pension – If you reach the state pension age on or before April 2016, you’ll get the basic state pension. The full amount is £156.20 per week and you’ll need 30 years of National Insurance contributions to get this. If you have the basic state pension you may also get a top-up from what’s known as the additional or second state pension. Those who have built up National Insurance contributions under both the basic and new state pensions will get a combination of both schemes.
