Retirement benefits

As you approach retirement you may look forward to a time of freedom and relaxation as a reward for years of hard work. When you retire, your income will usually be less than your income was when you were working. To make your retirement easier, you may be entitled to certain benefits and financial support in addition to your State Pension. These benefits depend on your age, your income, and other specific circumstances.

Benefits relating to retirement are provided through state benefits and supplementary schemes. Among the retirement benefits, the two main ones are the State Basic Pension and the State Second Pension. State pension is based on an individual’s National Insurance contribution. State pension age is currently 65 for men and 60 for women, however, this will change to 65 for both men and women from 2010, except women born before 6 April 1955.

Supplementary schemes provide benefits in addition to those provided by the state. Personal or private pensions are provided by pension companies who invest your savings on your behalf. With company (occupational) pensions, employers set up a pension scheme for their employees. In this case, employers make payments into the scheme on your behalf and this requires you to make regular payments from your salary.

There is a range of retirement benefits both before and during retirement. You are entitled to these benefits if you earn a low income, you are expecting or have recently had a baby, you have children who depend on you, you are ill, injured or disabled, you are caring for someone, you are aged 60 or over, you have been bereaved. These benefits may include help with extra heating costs, help with fuel during winter, free local bus travel off-peak, help with medical costs for war pensioners as well as pension for war widows or widowers. It is important to note that the benefits are based on your specific circumstances and to avoid benefit fraud it is important to update any changes.

The Department for Work and Pensions (DWP) manages most benefits through a network of pension centres. It is important to claim your benefits from the right place as each centre deals with one of four groups. These consist of benefits for families and children, benefits for individuals of working age, benefits for individuals who are planning to retire or who have retired, and benefits for disabled individuals and carers. For convenience, claims are usually paid into a bank or building society account, but they can also be paid into a Post Office account or be collected by another individual of your choosing if you are unable to do so yourself.

Whether it is spending more time with your family, going on that overdue vacation or finally finishing that novel you have been working on for years, it is worth planning your finances to make sure you get the most out of this time in your life and the retirement benefits you deserve.

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