State Pension

To qualify for the previous state pension you need to have worked and paid NI contributions, or have been on qualifying benefits.

In other words, to get the full basic state pension you'll need to have worked for most of your adult life and paid NI contributions, or been on qualifying benefits.

The actual amount you're entitled to is calculated by the number of NI qualifying years you've accumulated. So if you've got 20 years' worth, you'll get roughly two thirds of the full amount.

What counts as an NI qualifying year?

To gain a qualifying year, you need to have earned a set minimum during a tax year (6 April to 5 April) and paid the required NI contributions. For 2020/21, the minimum is:

• £6,240 for employees
• £6,475 for the self-employed

In past years, the amount was of course lower, but it has always been in relation to average salaries. So only those on very low wages may have missed out.

If you were working full time, even on the minimum wage – or had a job for a few days each week throughout the year – it's likely you earned a qualifying year.

Full-time parents and those who can't work

If you looked after children, or were unable to work, this is taken into account. You may be eligible for NI credits, which count as a qualifying year.

These are normally automatically awarded for the weeks you were claiming and receiving any of the following benefits: carer's allowance, jobseeker's allowance, incapacity benefit, employment and support allowance.

You also get them if you are a full-time parent who claims child benefit for someone under 12, or a full-time carer who claims income support.

Credits for parents and carers replaced home responsibilities protection from 6 April 2010.

If you reached state pension age on or after 6 April 2010 and you had years of home responsibilities protection before 6 April 2010, these years have converted into credits, up to a maximum of 22 years. These will go towards your basic state pension.

What happens if you don't have enough qualifying years

You may still be entitled to a PARTIAL state pension, but it depends on when you hit retirement age and how many qualifying years you have.

Retirement age hit BEFORE 6 April 2010:

If you had fewer than 25% of the qualifying years (44 for a man, 39 for a woman), then you wouldn't be entitled to a basic state pension. If you have 25% or more, it's likely you're getting an approximate pro-rata weekly income. In other words, if you've half the qualifying years, you'd get roughly half the full state pension.

However, if you don't qualify for the basic state pension and have no other income, you're usually eligible for pension credit, which ensures you receive a guaranteed minimum income. For more information, see our guide on Pension Credit.

Retirement age hit on or AFTER 6 April 2010 (but before April 2016):

If you have at least one qualifying year, you'll get one 30th of the full amount for each qualifying year. Therefore, if you've 18 qualifying years, you'll get 18/30th (three fifths) of the FULL state pension.

Retirement age hit in April 2016 or AFTER:

You will need to have at least 10 qualifying years to get anything. If you have between 10 and 35 qualifying years, you'll get a pro-rata rate.

You can boost your pension by buying qualifying NI years – we detail how, when and whether you should do this below.

What happens to your pension if you retire abroad

Once you reach the official retirement age you can claim your state pension, no matter where you live. However, what happens then depends on where you retire to.

In some countries, your pension will be frozen at the amount you're able to claim in the year you leave the UK. This may be fine now, but future inflation's likely to mean that you get less and less in real terms with each passing year.

To continue to get pension rises as if you're in the UK, you'll need to retire to:

Any country in the European Union, Barbados, Bermuda, Bosnia-Herzegovina, the Channel Islands, Croatia, Isle of Man, Iceland, Israel, Jamaica, Liechtenstein, Mauritius, Montenegro, North Macedonia, Norway, the Philippines, Serbia, Switzerland, Turkey or the United States of America.

Retiring to popular destinations such as Australia, Canada, New Zealand and South Africa means your pension won't be increased each year, as it would have done had you stayed in the UK.

Your state pension might be affected if you're transgender

Your state pension might be affected if you're transgender and you:

• Were born between 24 December 1919 and 3 April 1945
• Were claiming the state pension before 4 April 2005
• Can provide evidence that your gender reassignment surgery took place before 4 April 2005

You don't need to do anything if you legally changed your gender and started claiming state pension on or after 4 April 2005 – you'll already be claiming based on your legally-recognised gender.

There's a complicated maze surrounding the amount you get, but here's a brief summary:

• A single person in 2020/21 will get £134.25 a week of basic state pension, that's £6,981 a year.
• If you're married, and you and your partner have built up the full number of state pension qualifying years, you'll get double that amount, so £268.50 a week.
• If you're on a low income, you can boost your state pension by claiming pension credit. For more info, see the full Pension Credit guide.

But there's another crucial fact to remember...

The basic state pension is taxable, but if you don't have any other income, you won't be taxed. You only start to pay tax if you earn more than £12,500 (in the 2020/21 tax year).

That said, if you defer your pension any lump sum income you take is taxed differently.

The figures above are only rough guides, as many other variables affect the amount you will get. You can try Gov.uk's calculator for an indication. The best way to find out is to ring 0800 731 7898 (option 1).

Pension income will affect your benefit entitlement

A pension counts as if it were any other income, so will affect your entitlement to pension credit, housing benefit or council tax support. See the Benefits Check guide.

Your pension payment increases annually in April

There's a system called the 'triple lock' in place, which means every April the basic state pension amount increases by the highest of the previous September's inflation rate (based on the Consumer Prices Index), the increase in average earnings, or 2.5%. The triple lock is expensive and its future is under review.

However, your pension may not increase every year if you retire to certain countries outside the UK.