How much do you get and can you boost it?
The state pension saw a big change in 2016, affecting people retiring since then. While the Government's aim has been to make the system fairer for all and easier to understand, it can still be a minefield – and some people have lost out from the overhaul.
What is the state pension and when will I get it?
A 'flat-rate' state pension was ushered in on 6 April 2016. While the overhaul was designed to make the system easier to understand, it's still far from simple.
The flat-rate state pension ONLY applies to those reaching state pension age on or after 6 April 2016. This means millions of older people aren't affected by it and have simply carried on receiving their state pension under the previous system. In short:
- Retired post-April 2016? You will currently get a max state pension of £179.60 a week.
- Retired pre-April 2016? You will currently get a max basic state pension of £137.60 a week - although there's a top-up available for some called the additional state pension.
At what age will I receive the state pension?
You receive the state pension when you reach the Government's official retirement age. What that is depends on when you were born.
To cut costs, the official retirement age is gradually being raised. It has increased to 66 for men and women since April 2020, then it will rise to 67 by 2029, with a further rise to 68 due between 2037 and 2039.
The rising pension age for women has triggered much controversy – previously it was just 60. Campaign group WASPI – Women Against State Pension Inequality – has fought against the pace of change in women's state pension age, but lost a legal fight against the government.
To find your exact retirement age, see the Government's State Pension Age Calculator.
How do I claim the state pension?
While it might feel like an official life milestone, you won't get your state pension automatically – it's up to you to claim it:
- You will receive a letter reminding you to claim before reaching state pension age. No later than two months before you reach your state pension age you should get a letter from the Government's Pension Service telling you what to do. If you don't receive a letter, call the telephone claim line where staff will be able to discuss with you what you need to do.
- You then need to make the claim. There are three ways you can do this: by filling in a claim form online, by calling 0800 731 7898, or by downloading a claim form from Gov.uk and sending it to your local pension centre whose address can be found on the Government website.
Are you one of 10,000s of women missing out on £1,000s of state pension?
Tens of thousands of women are likely to have been underpaid the state pension, and many could be due £1,000s – some even £10,000s.
Married women who hit state pension age before April 2016, plus widows, divorcees and the over-80s – whether married or not – should check. While some women owed will now get an automatic payment, not all will.
For more on who could be missing out and whether you still need to claim, see our full MSE women's state pension guide.
How much state pension will I get?
What you get depends on how many so-called 'qualifying years' of national insurance (NI) contributions you have (and also if you retired post of pre April 2016). These are earned over your lifetime and how many you get generally depends on how many years you're in work.
You can also build them up as NI credits for time spent raising a family, if you care for someone who is sick or has a disability, or have been enrolled in full-time training.
To find out how many qualifying years you've already got, you can check the situation for yourself by going to the Government's website or phoning the national insurance helpline on 0300 200 3500.
The NI years needed for a full basic state pension are:
- 35 years: If you reached state pension age on or after 6 April 2016
- 30 years: If you reached state pension age on or after 6 April 2010
- 44 years (men), 39 years (women): If you reached state pension age pre-6 April 2010
In short, if you retired post-April 2016, this is how it works (for how it works pre-April 2016 see below):
To get any state pension at all you need...
- A minimum of 10 years before you'll get any payment at all. Reach this and you'll be paid 10/35ths of the total – currently £179.60 – which is about £51 a week. These qualifying years can be from before or after 6 April 2016 and don't have to be 10 years in a row – they can be dotted about over a much longer period.
- Less than 10 years and you won't get a penny (although pension credit should be available). Under the previous system (pre-April 2016), there was no minimum – you could still get a small payout even if you had just a few years of NI contributions.
To get the full (£179.60) basic state pension you need...
- 35 years to get the full state pension of £179.60 per week (which itself rises each year by 2.5%, inflation or average wage growth – whichever is highest). Crucially, you don't have to start from scratch from 6 April 2016 – any qualifying years earned before this date will count along with subsequent years.
- Some people can get more than that. Under the previous state pension rules, workers were able to build up what's known as the additional state pension (also called the second state pension, S2P, or SERPS) – a top-up to the former basic state pension. Although the current rules have now scrapped this top-up, the Government has allowed many workers in their 40s, 50s and early-60s to keep their existing entitlement.
This is part of the Government's pledge that people who worked to build up a healthy state pension under the previous rules shouldn't lose out under the new ones.
To make it work – and it is fiendishly complicated – what you'll get depends on a so-called 'starting sum' calculation. This compares what you'd have been entitled to under the old and new regimes – and, in a nutshell, you'll get the higher of the two. This extra money is known as your 'protected payment' and will be highlighted on your state pension statement.
To get somewhere in between you need...
- You'll get the equivalent value of the state pension according to the total number of years you've built up (but you still need a min of 10 years). So 23 years would give you roughly two-thirds of the current £179.60 payout, or about £119. As a guide to what you might get, multiply the number of years you've got by £5 – this figure is what each qualifying year is roughly worth.
- But there's a potential catch. Some years in which you paid NI don't count when working out how much you're entitled to because they're not deemed 'full' years. This could mean you end up with less than you imagined.
What count as qualifying NI years?
- For employees: £120/week, £520/month, £6,240/year
- For the self-employed: £125/week, £542/month, £6,515/year
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 work full-time, even on the minimum wage or just a few days a week throughout the year, you are likely to earn a qualifying year. And these qualifying years can be from before or after 6 April 2016 and don't have to be consecutive – they can be dotted about over a much longer period.
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.
There are some instances where it isn't done automatically and you have to apply; for example if you care for someone for at least 20 hours a week, you may be able to apply for carer's credit. 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.
You can check if you're eligible for credits, but you need to wait until a tax year ends on 5 April before you can apply for credits for the previous 12 months.
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) - 11 years for a man and 10 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.
More than 200,000 stay-at-home parents risk losing some of their state pension - check if you're affected
More than 200,000 stay-at-home parents or carers of under-12s risk losing some of their state pension because it's their earning partner who's registered for child benefit.
Even if your partner's bringing in £50,000 or more a year - the threshold where child benefit starts to reduce on a sliding scale - the non-earner is still entitled to NI credits – so make sure the right person is registered. You can also transfer NI credits from from one partner to another to boost your state pension.
How can I boost my state pension?
There are ways you can boost your state pension, however each option needs to be considered carefully.
You can put off claiming – 'defer' – your basic state pension. This can be useful if you're still working, as it means you could get larger pension payments later. Unless you claim your pension, it will automatically be deferred.
- How much extra can I get? It depends on when you reached/will reach state retirement age:
- For someone reaching state pension age AFTER April 2016: Every nine weeks you defer boosts your weekly state pension by 1%. If you hold off taking your state pension for 12 months, this works out as a 5.8% boost.
For someone entitled to the full £179.60 flat-rate pension, deferring by a year means they'll then get an extra £10.41 a week (about £541 a year). The extra amount is paid with your regular state pension payment.
- For someone reaching state pension age BEFORE 6 April 2016: If you opted to delay, a year's wait was worth the full value of that year's state pension plus 10.4% extra. You also have the option to take any deferred state pension as a lump sum. This is made up of the deferred payment plus interest at 2% above the Bank of England base rate. After collecting the lump sum, you then get the standard pension.
So someone who'd built up an annual state pension of, say, £6,000 would get £6,150 in 12 months' time – and then be paid their weekly payout as normal. However, this lump sum option has been abandoned for those who become eligible for state pension after April 2016.
- Should I defer my state pension? If you are still working at state pension age, or have other retirement income such as a company pension, deferring the state pension might seem a good idea.
However, you need to balance the prospect of a bigger state pension in the future against giving up £1,000s of pension income in the short term.
The answer to this lies in your longevity – and there's no crystal ball that can tell you how long you'll live. The Office for National Statistics produces a 'How Long Will My Pension Need to Last' calculator, which shows that on average a man aged 65 has 21 years to live and a woman aged 65 has 24 years.
When you eventually start drawing your deferred (larger) state pension, it will be years before you make up for the foregone payouts. The 'break even' point has been calculated as 17 years from when you start drawing your deferred state pension.
The longer you live, the more you stand to benefit from deferring. Equally, unless you live to a good age in retirement, deferring will cost you overall. Also, drawing your extra state pension may reduce the amount you get from state benefits such as pension credit, housing benefit and council tax reduction.
So the odds suggest that if you're healthy and can afford to defer, you're probably better off doing so because the extra cash will be paid for long enough to make it worth it. But there are risks of course: put off claiming for five years and you'll have forgone £30,000 in income. Although you'll then get a higher state pension payout, if you were to die suddenly you'd have lost out on a huge sum.
- When can I defer my state pension? You can defer it before you start receiving it BUT you also have the option to stop receiving your state pension once you've started it. If you'd like to do the latter, you can only do so once, ie, you can't start receiving it then stop receiving it, then start it and then stop receiving it again.
If you've got spare savings and can afford to be without the cash in the short term, it's also possible to replace some missing NI qualifying years. This could lead to a big increase in your basic state pension payout over your retirement.
If you're eligible, and you could benefit by boosting, buying extra years involves paying what are called 'voluntary class 3 NI contributions'.
The rate is £15.40 (2021/22) per missing week of NI contributions – £800 for a full year. You can typically only buy back years from less than six years ago, meaning it's mainly relevant for those retiring post-2016 but there are some exceptions (see below)
- How much extra can I get? In a nutshell, you pay a one-off lump sum to buy a higher yearly state pension sum. Assuming you live long enough, the extra cash you earn from a bigger weekly state pension could be worth £1,000s over a lifetime.
- Should I buy extra pension years? Whether it's a good idea will depend on whether you can afford to give up the cash needed to buy the extra years and whether you are likely to live long enough to make it worthwhile. Buying a full extra year for £800 will boost your pension by £4.80 a week, equivalent to about £250 a year. So if you buy one extra year you'll earn back what you paid in just over three years.
But before you boost your state pension, double-check it's worthwhile because – as always with pensions – there are some tricky rules.
The key that defines whether it's worth bothering is how many NI years you already have (remember that under the current state pension you need 35 qualifying years for a full-rate payout). You can check online whether you have any gaps in your NI record by getting a state pension statement or calling the Government's Future Pension Centre on 0845 3000 168 and it'll send you a statement.
- When can I buy the extra years? You can normally pay them after the year in question (so you have to wait until the end of the financial year) and normally you have up to six years to buy that 'extra' year in question. You don’t have to wait until you’ve reached pension age.
You might be able to buy extra years once you've started receiving your state pension as long as you keep to the six years' rule. However, you're unlikely to get the payments backdated.
The deadline to buy back years is 5 April each year. So you have until 5 April 2022 to make up for gaps for the tax year 2015 to 2016.
You can sometimes pay for years from more than six years ago. But it depends on your age. If you’re a man born after 5 April 1951 or a woman born after 5 April 1953, you have until 5 April 2023 to pay voluntary contributions to make up for gaps between April 2006 and April 2016.
See if you're getting what you're due
If you're a married woman who hit state pension age before April 2016, including widows, divorcees and the over-80s – whether married or not – you should check whether you're due a large payout. That's because tens of thousands of women are likely to have been underpaid the state pension, and many could be due £1,000s – some even £10,000s.
While some women owed will now get an automatic payment, not all will - but it's a great way to boost your pension, so definitely worth taking the time to check. For full information on who should claim and how you go about doing it, see our Women state pension guide.
There are some who may not be able to, or shouldn't, buy additional years.
Paid reduced NI? Married women sometimes paid less NI (known as the 'small stamp' or 'married woman's stamp') in return for some maternity benefits. But those who signed up to this can't replace any missing years where they paid reduced NI for the whole year.
Already at the maximum number of years? If you try to buy further years that would take you over the maximum number allowed, you'll normally be prevented from doing so by the Government.
Why you might get less state pension than you thought - the 'contracting out' problem
Contracting out isn't simple...
Before April 2016, the state pension was made up of two parts:
- The basic state pension, and
- Additional state pension, sometimes referred to as state second pension or SERPS (State Earnings-Related Pension Scheme).
If you are or were in a defined benefit company pension scheme you're likely to have been 'contracted out' of the additional state pension and paid a lower rate of NI contributions. This means you won't get £179.60 despite having what you thought were 35 years of NI contributions. What counts is 35 years of full contributions – not ones where you paid a lower NI rate.
To this end, the Government will deduct a sum from your new state pension. It says that although you'll get less than the full £179.60, retirees will still be paid what they would have got under the old state pension.
The sum is what the Government has coined your 'contracted out pension equivalent' (COPE) amount. If you ask for a state pension statement from the Government it will include this amount.
How can I find out if this will affect me?
You may have to dig out old payslips or P60s. If you were contracted out via a personal pension, you'll need to get your pension provider to confirm. You can check with your pension provider if you've been contracted out in the past. The Pension Tracing Service may be able to find your pension providers' details if you've lost contact with them.
You're more likely to have been contracted out if you work in public sector organisations and professions such as the armed forces, civil service, council, fire service, the NHS, police and teaching.
State pension Q&A
Instead of a flat-rate payout like the new £179.60 a week state pension, the previous state pension is made up of two parts.
The first element is the so-called 'basic' state pension.
This is simply worked out by totting up the number of eligible NI years you have.
These qualifying years are earned by working and paying NI contributions in a given year, if you're a carer, or if you're on certain benefits.
The most basic state pension you can currently earn is £137.60 a week, a maximum level which rises every April by the biggest of the following:
- Inflation in the previous September (using the Consumer Prices Index)
- The increase in average earnings
This is known as the 'triple lock' – a device to ensure older generations get the best deal possible.
The second element is known as the additional state pension.
This extra payout is called SERPS (state earnings-related pension scheme), S2P or the state second pension.
Like the basic state pension element, it is based on your NI contributions.
How much you get largely depends on what your salary was throughout your career and, to a lesser extent, whether you've claimed certain benefits such as child benefit or carer's credit.
You get the additional state pension paid automatically with your basic state pension and it increases every year with inflation.
The Government said the previous state pension was hard to understand and unfairly biased against many – notably women – who took time off work to care for others or raise a family.
Problems lie in the previous system being made up of two parts: a 'basic' state pension (worked out according to your number of national insurance years) and a 'second state pension', also known as S2P, SERPS or the additional rate.
While the first part was simple enough, the latter caused huge problems with its complexity – particularly when workers opted out of it (knowingly or otherwise) in a process called 'contracting out', which has left many out of pocket.
The new payout was designed to make the whole process easier to understand, though it's still far from simple.
The new set-up is also a huge boost for the self-employed who lost out hugely under the previouos system since they were unable to build up any second state pension.
No. Having more than 35 qualifying NI years doesn't boost how much state pension you receive. The only way you may get more is if your 'starting sum' under the new rules is higher than the maximum £179.60 pension.
Yes and no. Under the flat-rate state pension, class 2 NI contributions made by self-employed people who make a profit above £6,515 (in 2021/22), and class 2 and class 4 NI contributions for those with a profit above £9,568 (in 2021/22), will be treated the same as employee contributions and count towards the new state pension in the same way. This will include any contributions made before 6 April 2016.
Yes, you can, as long as you've paid enough UK national insurance (minimum 10 years) to qualify. If you've paid into a social security system overseas that has a dual agreement with the UK, or is in the EU, then those years can count towards the 10 years.
For example, if you have five years in the UK and five years in Portugal, then you'd get 5/35ths of the UK state pension. This is because the two periods combine to give 10 years, which meets the qualification, but only the five years in the UK actually count towards the amount. If you're unsure how many years you have you can ask for a state pension statement.
To claim, you need to be within four months and four days of your state pension age. You'll also need to contact the International Pension Centre. If you live part of the year abroad you have to choose which country you want your pension to be paid in. You can't be paid in one country for part of the year and another for the rest of the year.
You'll be paid in local currency – the amount you get may change due to exchange rates – and you can choose to be paid every four or 13 weeks. If your state pension is under £5 a week, you'll be paid once a year in December.
If you have moved abroad since 1 January 2021 then some changes have been made in relation to Brexit, read the Gov website for full details.
Your state pension will be calculated entirely under the new state pension rules. This is more likely to affect you if you were born after the year 2000, or became a resident of the UK after 2015.
Although your entitlement to the flat-rate state pension is based on your national insurance contributions alone, there are some circumstances where you can inherit parts of your spouse or civil partner's pension. What you get depends on different factors, such as:
- The number of years they've paid national insurance. Essentially, the longer they've worked, the more you're likely to get, as there's the potential they have accrued more.
- Whether your deceased spouse or civil partner had any additional state pension, protected payment, state pension top-up or 'graduated retirement benefit' (the earnings-related state pension people could build up between 1961 and 1975). If so, you could get more as there's more to pass on.
Working out exactly how much you're entitled to is complex. The Department for Work and Pensions' online tool allows you to see what you may get if your spouse or civil partner dies, based on your own circumstances.
If you reached state pension age and got married before 6 April 2016 and are therefore receiving your state pension under the previous pension rules, it's different. See above in the guide for more.
If you don't have enough money to buy additional NI years to get the full state pension, your payout may be boosted if you apply for pension credit.
Pension credit is an income-related benefit for low earners who don't qualify for the full basic flat-rate of £179.60 a week.
If you're eligible for pension credit you'll still be entitled to other benefits such as housing benefit. See our Pension credit guide for full information.
If your spouse or civil partner passes away, then just as in life, the pension you receive can be based on their national insurance contributions if their record is better than yours. For example, if you took a career break, you could use their years of NI contributions to plug that gap.
In addition to their state pension, if your spouse or civil partner reached state pension age before 6 April 2016, you may inherit some of their state pension top-up and half their 'graduated retirement benefit' (the earnings-related state pension that people could build up between 1961 and 1975) if applicable. You may also inherit some of your spouse or civil partner's deferral payment if they put off claiming their state pension.
How to work out what you'd get
The Department for Work and Pensions provides an online tool which allows you to see what you may get if your spouse or civil partner dies.
However, be aware that you will not get anything if you remarry or form a new civil partnership before you reach state pension age. There are more details on how this works on Gov.uk.
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.
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 £12,570 (in the 2021/22 tax year).
That said, if you defer your pension any lump sum income you take is taxed differently (this is only an option if you retired pre-April 2016).
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).
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.
Clever ways to calculate your finances