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What the Germans did for us

The state pensionis not worth a fortune, but there is no point in missing out

Otto von Bismark is an unlikely figure to associate with state pensions.

Yet the Iron Chancellor, right, is credited with introducing the first official payments in Europe for the elderly and infirm - though a big thank you should go to the rebellious working-class folk of 19th-century Germany who forced his hand.

Germany led the way and the rest of the continent followed, some countries eagerly. The UK, though, is dragging its feet. Its state pension scheme is poor in European terms though occupational schemes do make comparisons difficult. UK state provision is complicated and far from generous, currently paying out pound;82.05 a week for a single person and pound;131.20 for a couple. Still, pound;82.05 a week works out at pound;4,267 a year, a sum not to be sneezed at, even though it is taxable. Like everyone else, teachers earn the right to a state pension through paying National Insurance contributions so it is a good idea to check your NI record.

A woman with a working life of 44 years needs 39 qualifying years to get the full pension, and a man with a working life of 49 years needs 44 qualifying years. (A qualifying year is a tax year in which you have earned a certain amount of money, pound;4,264 in 2005-6, upon which you have paid NI contributions.) The gender difference, due to the fact that women's state pension age is 60 and men's is 65, will disappear by April 2020 when both sexes will have to work to 65 to get the full amount.

Teachers who have paid NI contributions for fewer years may get a smaller pension, but anyone who retires with less than a quarter of the qualifying years will get nothing. You are allowed to make up missed contributions but only for six years after non-payment. Teachers who suffer ill-health or take time off to raise children or care for elderly parents may qualify for home responsibilities protection, which will safeguard their state pension.

Women often lose out. In 2002, it was revealed that 92 per cent of men currently qualify for the full British state pension, but only 49 per cent of women.

The pensions credit, a means-tested benefit for the over-60s introduced in 2003, guarantees a minimum weekly income of pound;102.10 for a single pensioner and pound;155.80 for couples. About five million could qualify.

Probably not many will be teachers, but its existence could impact on low-paid ancillary workers in schools. The perverse effect of this well-intentioned benefit could be to deter poorly paid employees from joining an occupational scheme. They'd be paying contributions, but would be no better off than if they had not.

Another innovation, introduced last month, allows people to delay claiming their state pension indefinitely. Putting off claiming lets you choose between a larger weekly amount for the rest of your life or a one-off lump sum payment equivalent to your pension plus interest.

And those who reach 80 can toast the fact that they qualify for 60 per cent of the basic state pension no matter what they have paid in the way of NI, so long as they fulfil other requirements, such as residency rules.

Finally, the Pension Service should send you a claim form four months before you reach state pension age - about the right time to start planning your party.

For most state pension queries, including a personal forecast, contact the Pension Service, tel: 0845 6060 265, or www.thepensionservice.gov.uk

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