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Retirement BenefitsIntroduction There are very few benefits that are specifically related to retirement; most of them are linked to age, which may or may not be linked to retirement. Indeed, now that there is no such thing as a default retirement age (when employers used to be able to retire employees purely because they had reached a certain age) it would be difficult to relate benefits to retirement.
The one exception is, of course, pensions. Many people will receive a pension from their employer when they retire and we will all get the state pension. However, even with pensions, the link between receiving them and retirement is, in many cases, no longer present. We are now allowed to receive our company pension and then carry on working and, although many people call the age at which they receive their state pension, 'retirement age', it needn't necessarily be. We can retire before or after we start to get the state pension; there are no rules against that. However, the benefits that we are concerned with are related to an age at which many people will retire or will already have retired, so it is quite legitimate to call them 'Retirement Benefits'. This page is an introduction to these retirement benefits with links to further information about them. Pensions Occupational Pensions Personal Pensions If you have been paying into a personal pension, it is very probable that you will take it when you retire and this will become a retirement benefit for you. You will probably buy an annuity with the fund that you have built up, which will provide you with a regular income. There are many kinds of annuity and the situation can be quite complicated. Also, you do not have to buy an annuity from the organisation to which you have been paying your contributions; there is something called the Open Market Option' which means that you can shop around and get the best deal (or retirement benefit) that you can find. You will need to talk to the organisation to which you have been paying your contributions and it may be beneficial to talk to an Independent Financial Advisor (IFA). If you haven't already got an IFA and there is no-one who can recommend one to you, go to www.unbiased.co.uk to find one in your area. For more information on personal pensions and links to other sources of information,, go to our Guide to Retirement Pensions. State Pension To receive the full basic state pension, as a retirement benefit, we must have paid a minimum of 30 years National Insurance contributions or have been receiving Child Benefit or other benefits such as Carer's Allowance. For more details on this, go to www.directgov.co.uk. If you have also paid into SERPS or State second Pension (S2P) you will get more than the basic state pension. Again, go to www.directgov.co.uk for more information. The state pension age for men is 65 but, between 2018 and 2020 will rise to 66. The age for women is already rising and will go to 65 by April 2018 and 66 by October 2020. However, you may defer it if you wish so that you receive more when you do claim it. To find out more about exactly when you will receive the state pension, go to this page at direct.gov.uk and for more information about deferring it, click here. For a more comprehensive overview of the state pension, go to the page on state pensions in our Guide to Retirement Pensions. Other State Retirement Benefits Once you are at state pension age there may be other retirement benefits to which you are entitled. Pension Credit If your income in retirement, including savings, is below a certain level then you may be entitled to Pension Credit, which is designed to bring everyone's income up to a basic level. For 2011/12, this level is £137.35 for a single person and £209.70 for a married couple. Go to the Pension Credit page of direct.gov.uk for more information. There is also a Pension Credit calculator that you can use to see how much you could be entitled to. Free Prescriptions and Sight Tests Once we reach the age of 60 we are entitled to free prescriptions and free eye sight tests. For more information go to direct.gov.uk. Winter Fuel Payment Once you get to the women's state pension age, you are entitled to the winter fuel payment. That means for men, they can receive it once they reach the pension age for a woman born on the same day. You can see when this is by going to the State Pension Age Calculator on direct.gov.uk. For 2011/12, the rate is £200 per household if you are under 80 and £300 for the over 80s. If there are two people in the household who qualify, the allowance is shared between both. It is paid in November and December and to receive it this year you have to have been born on or before 5 January 1951. For more information, click here. The first year that someone in the household becomes entitled to Winter Fuel Payment, we have to apply for it. After that, it should come automatically as a retirement benefit. Subsidised Transport We qualify for the 'bus pass' once we reach 60 if we were born before April 1950. If you were born after that date we qualify for this particular 'retirement benefit' once we reach the state pension age for women (see above). If you live in England, the bus pass gives you free local bus travel anywhere in England between 9.30am and 11pm on weekdays and all day at weekends and public holidays. The situation is slightly different for Wales, Scotland and Northern Ireland. If you live in these countries, go to this page and click the relevant link. If you live in London, you get the 'Freedom Pass' once you have reached the state pension age for women, so go to the Freedom Pass website for more details. If you live elsewhere in England, click here to find out more. We apply for the bus pass to our local council. Once you get to the age of 60 you are also entitled to the Senior Railcard. For an annual charge (£28 for 2011/12) you get one-third off fares across the whole of Britain. You can buy it online or at the booking office of railway stations. For more details and to buy one online, go to www.senior-railcard.co.uk. Other State Retirement Benefits For those people on low incomes there may be other benefits available, such as the cold weather payment and help from the social fund. For a list of these and links to more details, go to this page on direct.gov.uk. Also have a look at the laterlife Guide to Concessions and Discounts. Private Sector Benefits There is a whole range of retirement benefits that are available in the private sector once we reach the qualifying age. This age may be 60, it may be the state pension age for women or it may be 65; it depends on the organisation that is making the discount. It would be impossible to list them all here because they range from local pubs and hairdressers to attractions and exhibitions, sporting events and large stores (B & Q has its diamond card that gives the over-60s10% off on Wednesdays, for example). However, for a more comprehensive explanation of these discounts, go to the laterlife Guide to Concessions and Discounts. What everyone over 60 should do is to research their local area to see which shops and organisations are offering age-related discounts and then take advantage of them. Similarly, if you are visiting somewhere, do whatever research you can, using the Internet, for example, so that you can take advantage of the available retirement benefits whilst you are there. Summary There are many 'retirement benefits' that are available to us, both in the public and private sectors. However, remember that, for the vast majority of them we don't actually have to be retired - they are age-related rather than retirement related. So make sure that you are aware of them, apply for them if applicable and take advantage of all the retirement benefits that are available to you. Related guides and articles: Retirement Today -
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