New state pension rules give self-employed a weekly boost

Self-employed professionals are now entitled to up to £155.65 a week compared with a previous maximum entitlement of £119.30 under the previous basic state pension; an increase of £145.40 a month.

Despite the new state pension rules seven-in-ten self-employed professionals are not yet aware of their new entitlement.

Steven Cameron, pensions director, Aegon UK, who carried out the study, said: “For those self-employed individuals who reach state pension age from today, it’s a case of ‘What a difference a day makes’.

“Someone who reached their state pension age – currently 65 for men and 63 for women – on or before 5 April will continue to receive a state pension under the previous regime.

“The self-employed were excluded from the additional earnings related pension so their maximum possible state pension was £119.30.

“But those reaching state pension age on or after 6 April will receive the new state pension which can be up to £155.65 a week – an extra £36.35 a week.

“With many people spending more than 20 years in retirement, some self-employed could gain almost £40,000 more from being eligible for the new state pension.

“While this may come as a very pleasant surprise to the growing number of self-employed who reach state pension age in future, even at the higher level it is unlikely to provide a comfortable lifestyle in retirement.

“Unlike employees, this group are not benefiting from automatic enrolment into a workplace pension, making it even more important to make adequate private pension provision for themselves.”

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Date published 8 Apr 2016 | Last updated 8 Apr 2016