When can I receive the State Pension and how much will I get? We answer this and other questions below, to help you understand the State Pension and how it might affect your income in retirement.
What is the State Pension?
The State Pension is a regular payment from the Government. It is usually paid every 4 weeks from State Pension age until death.
Who is entitled to the State Pension?
To be eligible for the State Pension you must have reached State Pension age and have paid at least 10 years of National Insurance (NI) contributions. To receive the full State Pension you must have paid 35 years of NI contributions.
If you have never worked, and therefore never paid NI, you may still be eligible for the State Pension if you have received certain state benefits, for example carer’s allowance or Universal Credit.
How much is the State Pension?
For the current tax year 2023/24, those entitled to the maximum State Pension will receive £203.85 per week.
This is based on 35 years of full National Insurance (NI) contributions and/or NI credits.
Does the State Pension increase each year?
The basic State Pension increases each year by at least 2.5%. it could be more if the rate of inflation or the average earnings growth is more than 2.5%. If you retire abroad, this may not apply – check whether you’ll still receive increases each year.
At what age can I claim/apply for my State Pension?
From November 2018, women’s and men’s State Pension ages were aligned at 65. However, there are planned increases in the coming years. The State Pension age is set to rise for both men and women to 66, 67 or 68 depending on the individual's age.
If you don’t claim your State Pension in the year you reach State Pension Age, it will be increased when you do take it. For each year you delay, it increases by almost 5.8%.
Why is the State Pension age increasing all the time?
The State Pension Age is increasing all the time as we have an increasing population and people are living longer. This means that it is becoming very costly for the Government to maintain State Pensions.
Now that people are living longer, the belief is that they should be able to work longer before receiving their State Pension.
If individuals wish to retire early, they will need to ensure that they have enough savings, private pension or occupational pension provision to bridge the gap between their last salary payment and their first State Pension payment, which could be many years later.
How many years of National Insurance (NI) contributions do I need to pay to get the State Pension?
To receive the full State Pension, you must have a National Insurance (NI) contributions record for 35 years.
If you have less than 10 years NI contributions, you won’t receive any State Pension.
If the number of years you have been contributing for is between 10 and 35 years then the amount you receive will be proportionate to the number of years you have been contributing.
You can pay more to make up for any shortfall in your NI contribution record.
If you're not already getting your State Pension or delayed (‘deferred’) claiming it, you can apply for a State Pension statement, which will tell you how much you are likely to get.
How can I increase or top up the State Pension?
If you have gaps in your National Insurance (NI) contributions, for example because you were self-employed or working abroad, or were unemployed but not claiming benefits, then you can pay to make up any gaps.
Is the State Pension taxable?
For the current tax year, 2023/2024, if your total annual income is over £12,570 then you will need to pay income tax on your State Pension.
What is the State Earnings Related Pension Scheme (SERPS)?
The State Earnings Related Pension Scheme (SERPS), originally known as the State Earnings Related Pension Supplement, was a UK Government pension arrangement, to which employees and employers contributed between 6 April 1978 and 5 April 2002, when it was replaced by the State Second Pension. The purpose of the scheme was to provide a pension in relation to your earnings, in addition to the basic State Pension.
Employees who paid full Class 1 National Insurance (NI) contribution between 1978 and 2002 earned a SERPS pension. Members of occupational pension schemes could be 'contracted out' of SERPS by their employer, in which case they and the employer would pay reduced NI contributions, and they would earn virtually no SERPS pension.
The principle was that everyone would receive a SERPS pension of 25% of their earnings above a 'lower earning limit' (approximating to the amount of the basic State Pension). The scheme was phased in over twenty years so that those retiring before 1998 received a SERPS pension proportional to the number of years that they had made contributions to it. There was an 'upper earning limit' of about seven times the lower earning limit, beyond which earnings were disregarded for NI contributions and calculation of SERPS pensions.
What is the State Second Pension (S2P)?
The State Second Pension (S2P), or Additional State Pension, was introduced in the UK by the Labour Government on 6 April 2002, to replace the SERPS (State Earnings-Related Pension Scheme). The Additional State Pension was replaced for new pensioners by the new State Pension on 6 April 2016.
What is the Old State Pension?
The old State Pension, or Basic State Pension (pre 6 April 2016) is a regular payment from the Government paid to you based on your previous National Insurance (NI) contributions that people claim in later life. You can claim the old State Pension if you reached State Pension age:
- A woman born on or before 5 April 1953
- A man born on or before 5 April 1951
If you were born after the above dates and therefore reach State Pension age on or after 6 April 2016, the new State Pension rules will apply.
What is the New State Pension?
The New State Pension was introduced on 6 April 2016 for people reaching State Pension age on or after that date. The New State Pension is a regular payment from The Government that most people can claim in later life. You can claim the New State Pension at State Pension age if you have at least 10 years National Insurance (NI) contributions and are:
- A man born on or after 6 April 1951
- A woman born on or after 6 April 1953
If you were born before these dates, you remain on the old pre-2016 State Pension, otherwise known as the old State Pension or the Basic State Pension.
Rewire your retirement
How are you planning on making the most of your time in retirement? Visit our Rewirement page to find articles on everything from lifestyle to finance to help you enjoy your colourful retirement.
Pension Wise from MoneyHelper
The government’s free and impartial service, offering guidance to make money and pension choices clearer.
To find out more or book an appointment online click below or call.
0800 138 3944
8am to 6.30pm, Monday to Friday.
Calls may be recorded and monitored.
Speak to us
Our colleagues in Cardiff are always happy to answer your questions or help you apply for a quote.
0800 048 2446
Monday to Friday
9am to 5pm
We may record and monitor calls.
Find an independent financial adviser in your area through Unbiased.