The State Pension provides a weekly income once you reach State Pension age, topping up income you may receive through private pensions or acting as a safety net for those that haven’t been able to save for their retirement.
How much is the State Pension?
In 2023/24 the full new State Pension is £203.85 a week. But not everyone will get the full amount. How much you receive will depend on your National Insurance record.
There is also a possibility of receiving a higher State Pension payment if you qualify for an element of Additional State Pension – this is a top up to the State Pension that entitlement could be built up to until April 2016 if you earned above a certain amount. There are different forms of Additional State Pension you may have contributed to, including Graduated Retirement Benefit, the State Earnings Related Pension (SERPS), and the State Second Pension (S2P).
If you reached state pension age before 6 April 2016, you’ll receive the basic State Pension rather than the new State Pension. In 2023/24, the full basic State Pension pays £156.20 a week, depending on your National Insurance record. If you are a widow or widower, you could receive a higher amount based on their National Insurance contributions. If you’re eligible, you might also receive a separate payment relating to the Additional State Pension.
The government has a tool that can forecast how much State Pension you should get.
When will I get my State Pension?
You can claim it once you reach the State Pension age, which depends on when you were born. The State Pension age was 65, but it is gradually increasing and now depends on when you were born and will reach 67 by 2028. This is currently under review, however and may well change.
The government will usually write to you a few months before you reach State Pension age to invite you to claim.
What if I don’t need the State Pension?
If you don’t need your State Pension – for example, if you are still working or have a good private pension – you can defer it in return for a higher weekly payment when you do eventually claim. Your State Pension increases by 1% for every nine weeks you put off claiming it, so that’s an extra 5.8% for each year you defer, and it rises in line with inflation.
» MORE: How to delay your pension
What if my State Pension isn’t enough?
If you only qualify for a small amount or no State Pension, you may also be eligible for pension credit, a means-tested benefit to top up your weekly income – this has two elements: guarantee credit and pension savings credit. How much you get will depend on how much income you have from all sources, including joint income and joint savings if you are in a couple.
Who is eligible for the State Pension?
Your eligibility for the new State Pension is directly linked to your National Insurance record.
To claim the full new State Pension you will need to have made 35 qualifying years of National Insurance contributions before you reach State Pension age. If you’ve paid less than this, you will get a reduced payment, and you need at least 10 years to claim any new State Pension at all.
The new State Pension was introduced in 2016 and is available to women born on or after 6 April 1953 and men born on or after 6 April 1951. If you were born before these dates you will need to claim the old scheme, known as the basic State Pension.
How do I pay National Insurance?
If you are employed by a business you will pay National Insurance through your payslips, or voluntarily through your tax return if you work for yourself.
However, if you’ve ever had periods of unemployment, self-employment or low earnings, lived abroad or taken a career break, you may have gaps in your NI record. You can usually top up your NI contributions for the last six years with extra payments yourself.
It is important to note, that if you were claiming certain benefits during this time, including job seekers’ allowance, universal credit or child benefit, you will receive National Insurance credits to plug these gaps. You can check your NI record on the government’s website and find out more about voluntary contributions.
How to claim Child Benefit to boost your State Pension
If you’re a parent who is not working because you are caring for children, it’s important to claim Child Benefit. If your partner earns more than £50,000 a year, they will have to repay the amount of Child Benefit you receive through the High Income Child Benefit Tax Charge.
For simplicity, some parents opt to stop their Child Benefit, but in doing so they stop NI credits automatically being added to their record, which could mean they end up without enough NICs to be eligible for the full State Pension.
What other ways can I save for retirement?
While the State Pension will be an important part of your overall retirement income, it won’t be enough to give you a good standard of living. That’s why it is important to save during your working life in a personal pension or a workplace scheme.
A qualifying recognised overseas pension scheme – or QROPS – is a pension scheme based in another country that might prove a suitable destination if you wanted to transfer your UK pension scheme abroad. You should definitely consider getting advice before making a QROPS transfer.
You might have a guaranteed minimum pension if you were a member of a contracted out final salary scheme before April 1997. A GMP pension should pay a level of income that is at least comparable with how much you would have received if you had been contracted into SERPS.