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Home    State Pension

State Pension

(Please note – this is for information only and does not constitute advice. This is a potentially complex area and for further information or to obtain a State Pension statement please visit the government website at https://www.gov.uk/browse/working/state-pension)

About the state pension

A State Pension is a regular payment made by the government to people who have paid or been credited with a minimum amount of Class 1, 2 or 3 National Insurance Contributions and have reached State Pension age.

State Pension Age

The State Pension age for men and women is currently 66 but will increase to 67 between 2026 and 2028.

Under the current law, the State Pension age is due to increase to 68 between 2044 and 2046. However, the Pensions Act 2014 provides for reviews of the State Pension age at least once every 5 years, taking into account a range of factors that are relevant to setting the pension age, one of which will be changes in the life expectancy of the population. Following a review in 2017, the government announced plans to bring this timetable forward, increasing the State Pension age to 68 between 2037 and 2039. At present, this is the government’s intention, and will need to be voted into law.

The State Pension is paid whether the claimant is working or not and is paid regardless of any income and/or existing savings or capital the claimant may have.

Claiming the State Pension

The State Pension must be claimed — it is not paid automatically. The claim can be made online, by calling 0800 731 78098 or by downloading a form and sending it to a pension centre. N.B. Different arrangements apply in Northern Ireland.

Payment frequency

The State Pension is usually paid every 4 weeks, in arrears, directly into the claimant’s bank or building society account.

Working beyond State Pension age

The State Pension can be claimed even if the individual chooses to work beyond State Pension age.

The State Pension may be taxable

The State Pension is considered part of the recipient’s earnings and may be subject to income tax.

Postponing the State Pension

It is not compulsory to claim the basic State Pension at State Pension age — it can be deferred until the claimant chooses to receive it. In return for ‘postponing’ his or her claim (and providing the claimant lives in the EU, European Economic Area, Gibraltar, Switzerland or any country the UK has a social security agreement with) the pension payment will increase by 1% for every 9 weeks it is deferred.

Claiming the State Pension while living overseas

Although the State Pension can be claimed while living outside of the UK, it will only be increased each year if the claimant lives in the EEA, Switzerland or in a country which has a social security agreement with the UK.

Basic State Pension on death

Any surviving spouse or civil partner that is over State Pension age and not already receiving the maximum payment may be able to increase their State Pension by using the deceased’s qualifying years. If the spouse or civil partner is under State Pension age, any State Pension based on the deceased’s qualifying years will be included when he or she claims their own State Pension.

 

There are currently two State Pension systems — each system has different rules.

 

The State Pension for individuals reaching State Pension age prior to 5 April 2016 ('old' State Pension).

This summary applies only to women born before 6 April 1953 and men born before 6 April 1951. Different rules and benefits may apply for people living in the Isle of Man, Northern Ireland and abroad.

Maximum payment

For the financial year 2022/2023, the full rate of benefit for women born before 6 April 1953 and men born before 6 April 1951, is £141.85 per week.

The payment is increased every year by whichever of the following three percentages is the highest:

  • the average percentage growth in wages in Great Britain
  • the percentage growth in the Consumer Price Index
  • 2.5%

National Insurance Contribution record

The amount of State Pension a person receives is based on the total number of annual National Insurance Contributions (NICs) paid in the UK by him or her prior to reaching their State Pension age.

To be entitled to the full State Pension, it is necessary to have 30 ‘qualifying years’ of NICs or credits. A qualifying year is a tax year in which the claimant has paid or been treated as having paid or has been credited with sufficient NICs to make that year qualify in State Pension calculation terms.

Each qualifying year entitles the claimant to 1/30 of the full State Pension.

If there are ‘gaps’ in his or her NIC record, the claimant will get less than the full amount of £141.85 a week. NIC gaps can be caused by being employed but with low earnings, being unemployed but not claiming benefits, caring for someone full time, being self-employed and choosing not to pay NICs, or living abroad.

Bridging the contribution gap

Depending on the claimant’s age, it may be possible to pay voluntary NICs to bridge some or all of the  gaps in his or her National Insurance record over the past 6 years or beyond.

 

The new State Pension (for individuals reaching State Pension age after 5 April 2016)

This summary applies only to women born on or after 6 April 1953 and men born on or after 6 April 1951. For individuals who are already claiming a State Pension, or reached State Pension age before 6 April 2016, the old State Pension rules apply. Different rules and benefits may apply for people living in the Isle of Man, Northern Ireland and abroad.

Maximum payment

For the financial year 2022/2023, the full rate of benefit for people reaching State Pension age, on or after 6 April 2016, is £185.15 per week.

Unlike the old State Pension, the new State Pension will not be subject to additional pension-related benefits, such as the State Second Pension (S2P) and the State Earnings Related Pensions Scheme (SERPS). The new State Pension will instead provide a single tier of benefit.

The payment is increased every year by whichever of the following three percentages is the highest:

  • the average percentage growth in wages in Great Britain
  • the percentage growth in the Consumer Price Index
  • 2.5%

National Insurance Contribution record

The amount of State Pension a person receives is based on the total number of annual National Insurance Contributions paid in the UK by him or her prior to reaching their State Pension age.

To be entitled to the full State Pension, it is necessary to have 35 ‘qualifying years’ of National Insurance Contributions (NICs) or credits. A qualifying year is a tax year in which the claimant has paid or been treated as having paid or has been credited with sufficient NICs to make that year qualify in State Pension calculation terms.

Each qualifying year entitles the claimant to 1/35 of the full State Pension.

If there are ‘gaps’ in his or her NIC record, the claimant will get less than the full amount of £185.15 a week. NIC gaps can be caused by being employed but with low earnings, being unemployed but not claiming benefits, caring for someone full time, being self-employed and choosing not to pay NICs, or living abroad.

Bridging the contributions gap

Depending on the claimant’s age, it may be possible to pay voluntary NICs to bridge some or all of the gaps in his or her National Insurance record over the past 6 years or beyond.

National Insurance Contributions made before 6 April 2016

The claimant’s National Insurance record before 6 April 2016 is used to calculate a ‘starting amount’ for their pensions. The starting amount will be the higher of the amount he or she would get under the old State Pension rules (less any Additional State Pension) or the amount they would get if the new State Pension had been in place at the start of their working life. If the starting amount is less than the full new State Pension, the claimant is allowed to add more qualifying years to their National Insurance record.

National Insurance contributions made after 6 April 2016

Individuals starting to make NICs from 6 April 2016 onwards, will need 35 years of NICs or credits to claim the full amount of state pension. Those with 10 - 34 years of contributions will receive a proportion of the full State Pension and anyone with less than 10 years of contributions will not be entitled to any amount of State Pension.

Tax treatment varies according to individual circumstances and is subject to change.

PENSION ENQUIRY FORM

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We may need to collect sensitive personal data including information about your health, ethnic origin, or criminal prosecutions from third parties such as employers and credit reference agencies, fraud prevention agencies and other similar organisations in order to provide you with the services, for example where you require advice on annuity or protection products.

If you consent to us obtaining your sensitive personal data from third parties referred to above for the purpose of providing you with the services, and sharing it with third party providers and Quilter Financial Planning to obtain quotes on your behalf, for example where we are providing you with annuity or protection advice as part of our services, please tick this box.

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(Please note – this is for information only and does not constitute advice. This is a potentially complex area and for further information or to obtain a State Pension statement please visit the government website at https://www.gov.uk/browse/working/state-pension)

About the state pension

A State Pension is a regular payment made by the government to people who have paid or been credited with a minimum amount of Class 1, 2 or 3 National Insurance Contributions and have reached State Pension age.

State Pension Age

The State Pension age for men and women is currently 66 but will increase to 67 between 2026 and 2028.

Under the current law, the State Pension age is due to increase to 68 between 2044 and 2046. However, the Pensions Act 2014 provides for reviews of the State Pension age at least once every 5 years, taking into account a range of factors that are relevant to setting the pension age, one of which will be changes in the life expectancy of the population. Following a review in 2017, the government announced plans to bring this timetable forward, increasing the State Pension age to 68 between 2037 and 2039. At present, this is the government’s intention, and will need to be voted into law.

The State Pension is paid whether the claimant is working or not and is paid regardless of any income and/or existing savings or capital the claimant may have.

Claiming the State Pension

The State Pension must be claimed — it is not paid automatically. The claim can be made online, by calling 0800 731 78098 or by downloading a form and sending it to a pension centre. N.B. Different arrangements apply in Northern Ireland.

Payment frequency

The State Pension is usually paid every 4 weeks, in arrears, directly into the claimant’s bank or building society account.

Working beyond State Pension age

The State Pension can be claimed even if the individual chooses to work beyond State Pension age.

The State Pension may be taxable

The State Pension is considered part of the recipient’s earnings and may be subject to income tax.

Postponing the State Pension

It is not compulsory to claim the basic State Pension at State Pension age — it can be deferred until the claimant chooses to receive it. In return for ‘postponing’ his or her claim (and providing the claimant lives in the EU, European Economic Area, Gibraltar, Switzerland or any country the UK has a social security agreement with) the pension payment will increase by 1% for every 9 weeks it is deferred.

Claiming the State Pension while living overseas

Although the State Pension can be claimed while living outside of the UK, it will only be increased each year if the claimant lives in the EEA, Switzerland or in a country which has a social security agreement with the UK.

Basic State Pension on death

Any surviving spouse or civil partner that is over State Pension age and not already receiving the maximum payment may be able to increase their State Pension by using the deceased’s qualifying years. If the spouse or civil partner is under State Pension age, any State Pension based on the deceased’s qualifying years will be included when he or she claims their own State Pension.

 

There are currently two State Pension systems — each system has different rules.

 

The State Pension for individuals reaching State Pension age prior to 5 April 2016 ('old' State Pension).

This summary applies only to women born before 6 April 1953 and men born before 6 April 1951. Different rules and benefits may apply for people living in the Isle of Man, Northern Ireland and abroad.

Maximum payment

For the financial year 2022/2023, the full rate of benefit for women born before 6 April 1953 and men born before 6 April 1951, is £141.85 per week.

The payment is increased every year by whichever of the following three percentages is the highest:

  • the average percentage growth in wages in Great Britain
  • the percentage growth in the Consumer Price Index
  • 2.5%

National Insurance Contribution record

The amount of State Pension a person receives is based on the total number of annual National Insurance Contributions (NICs) paid in the UK by him or her prior to reaching their State Pension age.

To be entitled to the full State Pension, it is necessary to have 30 ‘qualifying years’ of NICs or credits. A qualifying year is a tax year in which the claimant has paid or been treated as having paid or has been credited with sufficient NICs to make that year qualify in State Pension calculation terms.

Each qualifying year entitles the claimant to 1/30 of the full State Pension.

If there are ‘gaps’ in his or her NIC record, the claimant will get less than the full amount of £141.85 a week. NIC gaps can be caused by being employed but with low earnings, being unemployed but not claiming benefits, caring for someone full time, being self-employed and choosing not to pay NICs, or living abroad.

Bridging the contribution gap

Depending on the claimant’s age, it may be possible to pay voluntary NICs to bridge some or all of the  gaps in his or her National Insurance record over the past 6 years or beyond.

 

The new State Pension (for individuals reaching State Pension age after 5 April 2016)

This summary applies only to women born on or after 6 April 1953 and men born on or after 6 April 1951. For individuals who are already claiming a State Pension, or reached State Pension age before 6 April 2016, the old State Pension rules apply. Different rules and benefits may apply for people living in the Isle of Man, Northern Ireland and abroad.

Maximum payment

For the financial year 2022/2023, the full rate of benefit for people reaching State Pension age, on or after 6 April 2016, is £185.15 per week.

Unlike the old State Pension, the new State Pension will not be subject to additional pension-related benefits, such as the State Second Pension (S2P) and the State Earnings Related Pensions Scheme (SERPS). The new State Pension will instead provide a single tier of benefit.

The payment is increased every year by whichever of the following three percentages is the highest:

  • the average percentage growth in wages in Great Britain
  • the percentage growth in the Consumer Price Index
  • 2.5%

National Insurance Contribution record

The amount of State Pension a person receives is based on the total number of annual National Insurance Contributions paid in the UK by him or her prior to reaching their State Pension age.

To be entitled to the full State Pension, it is necessary to have 35 ‘qualifying years’ of National Insurance Contributions (NICs) or credits. A qualifying year is a tax year in which the claimant has paid or been treated as having paid or has been credited with sufficient NICs to make that year qualify in State Pension calculation terms.

Each qualifying year entitles the claimant to 1/35 of the full State Pension.

If there are ‘gaps’ in his or her NIC record, the claimant will get less than the full amount of £185.15 a week. NIC gaps can be caused by being employed but with low earnings, being unemployed but not claiming benefits, caring for someone full time, being self-employed and choosing not to pay NICs, or living abroad.

Bridging the contributions gap

Depending on the claimant’s age, it may be possible to pay voluntary NICs to bridge some or all of the gaps in his or her National Insurance record over the past 6 years or beyond.

National Insurance Contributions made before 6 April 2016

The claimant’s National Insurance record before 6 April 2016 is used to calculate a ‘starting amount’ for their pensions. The starting amount will be the higher of the amount he or she would get under the old State Pension rules (less any Additional State Pension) or the amount they would get if the new State Pension had been in place at the start of their working life. If the starting amount is less than the full new State Pension, the claimant is allowed to add more qualifying years to their National Insurance record.

National Insurance contributions made after 6 April 2016

Individuals starting to make NICs from 6 April 2016 onwards, will need 35 years of NICs or credits to claim the full amount of state pension. Those with 10 - 34 years of contributions will receive a proportion of the full State Pension and anyone with less than 10 years of contributions will not be entitled to any amount of State Pension.

Tax treatment varies according to individual circumstances and is subject to change.

PENSION ENQUIRY FORM

Your Address

Planning and Retirement

Employment

Existing Pension

Yes
No
Yes
No

Marketing Information

Sensitive Personal Data

We may need to collect sensitive personal data including information about your health, ethnic origin, or criminal prosecutions from third parties such as employers and credit reference agencies, fraud prevention agencies and other similar organisations in order to provide you with the services, for example where you require advice on annuity or protection products.

If you consent to us obtaining your sensitive personal data from third parties referred to above for the purpose of providing you with the services, and sharing it with third party providers and Quilter Financial Planning to obtain quotes on your behalf, for example where we are providing you with annuity or protection advice as part of our services, please tick this box.

Submit your Information

From time to time, we would like to contact you about our products and services which we think you might be interested in. If you consent to us contacting you for this purpose please tick to say how you would like us to contact you.

Email
Telephone
Post
Yes please, I'd like to hear about offers and services.
No thanks, I don't want to hear about offers and services.
Please tick this box to confirm you have read and understood our privacy policy.

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