Why is this important?
Table of contents
The State Pension is a regular payment from the government most people can claim when they reach State Pension age. Your State Pension age depends on when you were born. You can find out your State Pension age by using the calculator on the GOV.UK website at www.gov.uk.
This page gives you basic information about:
- how State Pension works and how it is changing
- what happens if you want to carry on working after State Pension age
- where you can get further information about pensions.
For more information about what benefits you may be entitled to when you retire, see Benefits for older people.
State Pension is changing
State Pension is changing for people who reach State Pension age on or after 6 April 2016. This will affect you if you are:
- a man born on or after 6 April 1951
- a woman born on or after 6 April 1953.
If you reach State Pension age before 6 April 2016, you are not affected by these changes, even if you have put off claiming your State Pension. You will still be able to claim a State Pension under the old rules, or continue to get the State Pension that you are already getting now.
GOV.UK has more detailed guidance about the changes.
In Northern Ireland these changes are not yet law. For further information see www.nidirect.gov.uk
Your National Insurance record
The amount of State Pension you get depends on your National Insurance record. This applies to both the new State Pension from 6 April 2016, and the old State Pension if you reach State Pension age before then.
Your National Insurance record includes National Insurance contributions that you pay when you are working and contributions that are credited to you when you are unable to work. For example, you can get National Insurance credits when you’re claiming Employment and Support Allowance or Jobseeker’s Allowance, or if you have caring responsibilities. Your record can also include voluntary contributions that you choose to pay to cover gaps when you are not working or getting credits.
When you reach State Pension age, you can claim a State Pension if you've paid or been credited with enough National Insurance contributions during your working life. What you get depends on how many ‘qualifying years’ of National Insurance contributions you have. Each tax year (6 April to 5 April) that you pay or are credited with National Insurance contributions counts as a qualifying year, provided you earn or are credited with earnings of at least a minimum amount. This amount changes every year.
If you reach State Pension age before 6 April 2016
If you reach State Pension age before 6 April 2016, you need 30 qualifying years of National Insurance contributions to get a full basic State Pension. You can get less than the full amount if you don’t have 30 qualifying years.
You may also qualify for an Additional State Pension depending on your contributions. This is sometimes known as State Second Pension. This is paid automatically on top of your basic State Pension. Some people don’t qualify for the Additional State Pension. For example, you may not get it if you were in a workplace pension scheme that was ‘contracted out’ of this part of the State Pension.
If you reach State Pension age on or after 6 April 2016
If all your contributions are paid or credited on or after 6 April 2016, you will need 35 qualifying years of contributions to get a full State Pension. If you have fewer than 35 qualifying years, you can still get some State Pension, provided you have at least ten qualifying years.
If you have paid or been credited with National Insurance contributions before 6 April 2016, these will be taken into account when your new State Pension is calculated. The amount of pension you get for these contributions will be at least as much as you would have got under the old State Pension, provided you have at least ten qualifying years. These can be from before or after 6 April 2016 and they don’t have to be ten years in a row.
You won’t get any Additional State Pension as this is being abolished under the new State Pension scheme.
Other changes from April 2016
You won’t usually be able to claim a pension based on the contributions of your husband, wife or civil partner, although there will be some limited exceptions.
‘Contracting out’ will end. Contracting out is where you pay a lower rate of National Insurance contributions because you are contributing to a certain kind of pension scheme, such as a final salary scheme. If this applies to you, you will start paying the standard rate of National Insurance from April 2016.
If you don’t have enough National Insurance contributions
If you don’t have enough qualifying years to get a full State Pension, you may be able to make up gaps in your National Insurance contribution record by paying voluntary contributions. There is a time limit for doing this. You can find out more about voluntary contributions and the time limits for paying them on the GOV.UK website at www.gov.uk.
How much will you get?
The full basic State Pension is £113.10 per week. From April 2015, this is increasing to £115.95 per week. You may be entitled to Additional State Pension on top of this.
The full new State Pension from 6 April 2016 will be at least £148.40 per week. The amount will be set in autumn 2015. Depending on your National Insurance record, you could receive a higher or lower amount.
You can get an estimate of how much State Pension you may get on the GOV.UK website. This is called a State Pension Statement. Go to www.gov.uk.
Increasing your pension by putting off your claim
You don't have to claim your State Pension when you reach your State Pension age. If you want, you can put off (defer) your claim and get extra pension when you do claim.
If you've already claimed your State Pension, you can cancel the claim so that you can get extra pension later on, but you can only do this once.
The extra pension can be paid to you either as an increase in your weekly rate of State Pension, or you can get it as a one-off lump sum.
In England, Wales and Scotland, you can get more information about deferring your State Pension on the GOV.UK website at www.gov.uk.
In Northern Ireland, you can get more information about deferring your State Pension on the nidirect website at www.nidirect.gov.uk.
You can choose to keep on working, whether paid or on a voluntary basis, while claiming your State Pension. Any money you earn will not affect your State Pension, but it may affect your entitlement to other benefits such as Pension Credit, Housing Benefit and Council Tax Reduction (help with your rates in Northern Ireland).
For more information about other state benefits, see Benefits for older people.
Top-up scheme for existing pensioners
If you are an existing pensioner or will reach pension age before 6 April 2016, a top-up scheme is being introduced from October 2015. Under this scheme you will be able to pay a lump sum National Insurance contribution in order to increase the amount of weekly pension you receive by up to £25 a week. The amount you will need to pay to increase your pension will depend on your age, with rates going down as you get older. For example, to get an extra £1 of State Pension a week for life you would need to pay £890 if you are 65 and £674 if you are 75.
The State Pension top-up can be inherited by a surviving husband, wife or civil partner.
You can find out how much you would need to pay to increase your pension by between £1 and £25 a week at www.gov.uk/state-pension-topup.
You can pre-register your interest in the scheme by emailing email@example.com or by telephoning 0845 600 4270.
For more information about State Pension and other benefits you may be able to get when you retire, see Benefits for older people. For more about other types of pensions and starting a pension, see Pensions.
You may also find the following Adviceguide information helpful:
The Money Advice Service
The Money Advice Service is a free, independent service. Their website has useful information about all types of pensions including a pension calculator for working out how much pension you'll need.
GOV.UK (in England, Wales and Scotland)
GOV.UK is the government website. It has information about State Pension, workplace pensions and personal pensions at www.gov.uk, and a State Pension Toolkit containing videos and fact sheets at www.gov.uk.
nidirect (in Northern Ireland)
nidirect is the official government website for Northern Ireland. It has information about the State Pension and other types of pensions, saving for your retirement and the changes to pensions that will be happening from 2016.
Go to www.nidirect.gov.uk.
The Pensions Advisory Service
Helpline: 0300 123 1047
The Pensions Advisory Service is an independent organisation that gives free information and advice on pension planning, including state, personal, workplace and stakeholder schemes.
TPAS doesn't provide financial or investment advice or recommend products.
The Age UK website has information about State Pension, including a detailed factsheet which can be found at www.ageuk.org.uk.