How does the State Pension work and how much might you get?

A new State Pension system was introduced from 6 April 2016. Find out how this affects you and how the State Pension works.

How much is the State Pension?

The full amount of the new State Pension is currently set at £179.60 a week. This normally goes up every year. The amount you receive depends on how many years of National Insurance contributions you have made or been credited with and your State Pension Age.

You can find out how much you are likely to get by getting a State Pension forecast.

How does the State Pension Work?

The State Pension is paid to people once they reach their State Pension Age and claim it.

If you’re reaching State Pension today, or have reached your State Pension since 6 April 2016, it will be based on the new rules. There are transitional rules in place to make sure you don’t receive less than you would have under the old system.

If you reached State Pension before 6 April 2016, your State Pension is based on the old rules in existence at that time.

When will I get my State Pension?

The State Pension Age for most people is now age 66. However, it is gradually rising to age 67 for anyone born after 6 April 1960 and to age 68 if you were born after 6 April 1977. 

If you were born before 6 October 1954, your State Pension age is between 60 and 66 depending on when you were born and whether you are a man or woman.

You can check your State Pension age on the GOV.UK website

Reaching your State Pension age now or since 6 April 2016

Your State Pension will normally be based on your own National Insurance contributions only.

To receive any State Pension at all, you’ll need to have made or been credited with at least 10 years of qualifying contributions on your National Insurance record.

To receive the full amount requires 35 years of qualifying contributions or credits.

You’ll receive a proportionate amount if you have between 10 and 35 years of qualifying contributions or credits. 

If you are or were a married woman, you may have elected to make contributions under the married women’s reduced rate (also known as the Married Woman’s Stamp) which applied before 1977. If this applies to you, your State Pension may be lower. You can find out more on the GOV.UK website

If you did not make National Insurance contributions or get National Insurance credits before 6 April 2016

Your State Pension will be calculated entirely under the new State Pension rules.

The full amount of the new State Pension is £179.60 per week for 2021/2022.

Each qualifying year gives 1/35th of the full amount, so if you have made or been credited with less than 35 years of qualifying contributions, you’ll receive a lower amount.

For example:

  • 35 years gives 35/35 x £179.60 = £179.60 a week
  • 30 years gives 30/35 x £179.60 = £153.94 a week
  • 10 years’ gives 10/35 x £179.60 = £51.31 a week.

Your new State Pension is more likely to be calculated in this way if you were born after the year 2000 or became a resident of the UK after 2015.

If you made National Insurance contributions or got National Insurance credits before 6 April 2016

Your National Insurance record before 6 April 2016 is used to calculate your ‘starting amount’.

Your starting amount will be the higher of either:

  • the amount you would get under the old State Pension rules (which includes basic State Pension and Additional State Pension)
  • the amount you would get if the new State Pension had been in place at the start of your working life.

Your starting amount will include a deduction if you were contracted out of the Additional State Pension. You may have been contracted out because you were in a certain type of workplace, personal or stakeholder pension.

If your starting amount is more than the full new State Pension

If your starting amount of State Pension is higher than the full new State Pension, then you get an extra amount. This is called your ‘protected payment’. It is paid on top of the full new State Pension.

This means that your state pension will not be lower than the state pension you would have got under the old scheme.

Any qualifying years you have after 5 April 2016 will not add more to your State Pension.

If your starting amount is less than the full new State Pension

You can get more State Pension by adding more qualifying years to your National Insurance record after 5 April 2016. You can do this until you reach the full new State Pension amount or reach State Pension age - whichever is first.

Each qualifying year on your National Insurance record after 5 April 2016 will add about £5 a week to your new State Pension. The exact amount you get is calculated by dividing £179.60 by 35 and then multiplying by the number of qualifying years after 5 April 2016.

Reached State Pension age before 6 April 2016

Your State Pension will be based on the old rules if you reached your State Pension age before 6 April 2016. 

You’ll have reached State Pension age if you were born before 6 April 1953.

There are two parts to the old State Pension – the basic State Pension and the Additional State Pension. They work slightly differently, and you could have built up an entitlement under both the basic State Pension and the Additional State Pension or just the basic State Pension.

You can find out more about these below. 

Basic State Pension

Payment of the basic State Pension is based on your National Insurance record.

To get the full amount you’ll need to have made or been credited with 30 years of qualifying National Insurance contributions to receive the full basic State Pension .

You only needed one year of qualifying contributions to get some basic State Pension. If your qualifying contributions were less than 30 years, you received a lower basic State Pension – based on the number of years of contributions or credits you had.

Spouses or civil partners may qualify for a basic State Pension, or an increase to their own basic State Pension, based on the NI record of their partner.

Additional State Pension

This is paid in addition to the basic State Pension. You built up an entitlement to additional State Pension if you were working for an employer and earning above a certain amount.

The Additional State Pension changed over the years. It started as Graduated Retirement Benefit before becoming State Earnings Related Pension (SERPS) and finishing as the State Second Pension (S2P). Each of these were in place at different times and worked slightly differently.

Types of State Pension
Graduated Retirement Benefit: 1961 to 1975
State Earnings Related Pension Scheme: 1978 to 2002
State Second Pension (S2P): 2002 to 2016

You might have built up an entitlement to this if you were:

  • employed and
  • paying Class 1 National Insurance Contributions

For every £7.50 contributed by a man or £9 contributed by a woman, the individual became entitled to a unit of graduated pension.

You might have built up an entitlement to this if you were: 

  • employed and

  • paying Class 1 National Insurance Contributions on earnings greater than the annual lower earnings limit

You might have built up an entitlement to this if you were:

  • employed and;
  • paying Class 1 National Insurance Contributions on earnings greater than the annual lower earnings limit

Alternatively, you may have qualified if:

  • You were looking after children aged under 12
  • Caring for a sick or disabled person
  • Working as a registered foster carer
  • Receiving certain other benefit as a result of illness or disability
Contracting out

Some people were contracted out of the Additional State Pension. Contracting out is the facility that allowed people to leave the Additional State Pension and build up benefits in a workplace or personal pension. This option was removed for many schemes from 6 April 2012 and stopped for defined benefit schemes from 6 April 2016.

If you were a member of a defined benefit scheme and you were contracted out, you and your employer would have paid less in National Insurance. In return for these National Insurance savings the pension had to promise to provide a minimum level of benefit which was broadly equivalent to what you would get, had you not been contracted out. 

If you were a member of a money purchase scheme (including personal and stakeholder pensions) some of the National Insurance savings made by you and your employer were invested into your pension instead. These contributions were held as ‘protected rights’. In some cases, restrictions may apply when you come to use them at retirement.

In both cases, you would be entitled to basic State Pension for the periods you were contracted out, but not Additional State Pension. This means your State Pension might be lower but you will have additional benefits held in a private pension arrangement.

Your State Pension could be made up of one or several parts:

How much State Pension will you get based on the old rules?

Basic State Pension

The full amount is £137.60 a week in the tax year 2021/22.

You’ll get a proportionate amount if you’ve built up less than the full number of years qualifying contributions in your National Insurance record. 

You may be able to get a basic State Pension or increase your basic State Pension using your spouse or civil partner's national insurance contributions. This could be up to a maximum of £82.45 a week.

SERPS and S2P*

The maximum additional pension (own and inherited) is £180.31 a week in the tax year 2021/22.

The amount paid will vary due to the different rules that were in place for each of the schemes at different times.

Graduated Retirement Benefit

For every unit of graduated pension you have you get 14.47 pence in pension in the tax year 2021/22.

When you reach age 80

You’ll be entitled to the age 80 addition which automatically increases your State Pension income by 25 pence a week.

* If you’ve ever contracted out of the Additional State Pension, your forecast will also show a Contracted Out Pension Equivalent (COPE).

The COPE figure is an estimate of the additional State Pension that you would’ve received had you not contracted out. As such, it is not paid as an addition to your State Pension, but the pension scheme with which you contracted out may have an additional entitlement as a result.

Where the pension with which you contracted out was part of a Defined Benefit scheme, it can often be found as a Guaranteed Minimum Pension (GMP) or Reference Scheme Test (RST) benefits.

If your income is below £177.10 a week in the tax year 2021/22 (£270.30 for a couple) you may be able to apply for Pension Credit which is a means-tested State Benefit that tops up your State Pension.

Delaying or stopping claiming your state pension

You can delay or stop claiming your State Pension and – when you do start to take or retake it – you might get extra money.

To get an extra amount of State Pension, you need to delay taking for a minimum amount of time. The amount you get depends on when you reach State Pension age and how long you delay taking it. The longer you delay or stop, the more you’ll get.

Any extra amount is paid with your State Pension and might be taxable.

What are qualifying National Insurance contributions or credits?

You make contributions by working and paying National Insurance (class 1 for employed individuals, class 2 and 4 for self-employed individuals.)

You can be awarded credits if you’re not paying National Insurance, for example when you’re claiming benefits because you’re ill or unemployed. Credits can count towards your State Pension and help you avoid gaps.

You can also make voluntary contributions which allow you to make up any shortfall in your record.

You may also qualify if you’ve paid married women’s or widow’s reduced rate contributions rate (also known as the Married Woman’s Stamp) which applied before 1977.

How can I check my State Pension entitlement?

You can get a forecast of your State Pension based on:

  • Your current NI contribution record and
  • The assumption you continue to make or receive National Insurance contributions or credits up until you reach State Pension age

The quickest way to get your State Pension forecast is online on the GOV.UK website

You need to be registered for HMRC’s online services.

If you’ll reach your State Pension age in more than 30 days you can also:

  • fill in the BR19 application form and send it by post. Get the form on the GOV.UK website
  • call the Future Pension Centre, who will post the forecast to you. Contact details are on the GOV.UK website

The online version of the forecast also gives you an opportunity to see a summary of your National Insurance contribution history.

You can also apply for a National Insurance statement from HMRC to check your record has any gaps on the GOV.UK website

What should I do if I have a gap in my National Insurance record?

The most common reasons you might have a gap are because:

  • you lived abroad for a period of time
  • you were employed but on low earnings (less than the LEL)
  • you were not working for a time and not claiming any benefits
  • you were self-employed but not paying national insurance contributions because your profits were below the Small Profits Threshold.

A gap in your record doesn’t necessarily mean you won’t receive a full new State Pension – as long as you’ll have built up 35 qualifying years by the time you reach State Pension age, you’ll receive the full amount.

However, if you have gaps in your record which mean you won’t get the full State Pension, then you could choose to make voluntary contributions to make up for these.

Do I pay tax on my State Pension?

Any State Pension income that you receive is treated as earned income for Income Tax purposes, although you no longer have to pay National Insurance contributions when you’ve reached State Pension age.

State Pension is paid to you before any tax is deducted however if you have other income from Pensions or employment, any tax due may be accounted for there.

What happens to my State Pension when I die?

If you die and you were married or in a civil partnership it may be possible for your partner to inherit some of your State Pension or increase their own State Pension. Any entitlement will depend on when you both reached State Pension age.

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impartial help for all your money and pension choices.
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impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

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