Usually state pensions are not automatically paid when a person reaches the appropriate age, they must be claimed. Additionally, for those who are able to, government pension payments can be received in addition to employment income.

There is nothing stopping people from claiming a state pension while working, which will clearly boost income during a person’s later years.

It should be noted that while state pensions can be affected by how a person worked before claiming it, when he or she begins to receive a government pension, the income from it will not be affected by wages.

The money a person earns and hours worked will not affect government pension amounts, but the claimant may have to pay tax on the state pension in addition to his earnings.

This has to be offset to some extent by the fact that people stop paying National Insurance upon reaching the state retirement age.

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People must receive a letter from the government no later than two months before they reach state pension age, directing them as to what to do.

However, even if a person does not receive this letter, they can still file a claim if within four months of reaching the state’s retirement age.

The government explains that the fastest way to claim a state pension is to apply online but it can also be claimed by phone or mail.

There will be slightly different procedures for those claiming the Isle of Man pension.

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Because these changes occur fairly frequently, it can be difficult to know exactly when to retire.

Fortunately, the government provides free tools to use on their website that will allow people to check:

  • When will they reach retirement age in the state
  • When they reach the age to qualify for a retirement pension
  • When they are eligible to travel by bus for free