State Pension Explained

What is the State Pension?

The State Pension is a regular weekly payment from the government that most people can claim once they reach State Pension age. The amount you receive depends on your National Insurance contributions and when you reach State Pension age.
 

How much is the State Pension?

The new State Pension for the current tax year is £230.25¹ per week.

Our retirement calculator can help you find out what your income and lifestyle could be in retirement.

Having the value of any pensions, savings and investments you have will help you get the most out of the calculator.
 

The new State Pension

This new State Pension only applies to men born on or after 6 April 1951 and women born on or after 6 April 1953. The new State Pension will be £230.25¹ per week in the current tax year. To claim any new State Pension you will need to have made National Insurance contributions (NICs) for at least 10 years.

¹This is the full amount based on having at least 35 'qualifying years' of NICs.

The new State Pension is the main source of retirement income for a lot of people in the UK. It is a guaranteed income that’s paid by the Government. You’re eligible to get your new State Pension once you reach State Pension age. If you don’t want to start taking it, then you can choose to defer receiving the payments to a later date (see below).
 

Who is eligible for the new State Pension?

You’re eligible for the new State Pension if you’ve paid, or been credited with, NICs which some may also know as their 'Stamp'. In the past there have been different categories of NICs which is why the State Pension can be confusing.

If you are or were employed, your NICs are deducted from your salary. These are paid directly to the Government, along with your employer’s contributions. If you are or were self-employed it’s your responsibility to pay your NICs, which are classed differently.

In the past the rules were different for men and women. To find out more about how much you can expect to get from your new State Pension, you can ask for a forecast by applying online at: www.gov.uk/state-pension-statement
 

What happens to your State Pension when you die?

Your basic State Pension is paid only to you and can’t be passed on to someone else when you die. If you have contributed towards an additional State Pension your spouse or civil partner may get some of this.

If your spouse or civil partner is under State Pension age when you die, any State Pension based on your qualifying years of entitlement will be added to their State Pension when they claim it. For this to happen they can’t have remarried or formed a new civil partnership by the time they reach State Pension age.

If you’ve deferred your State Pension and you die, your spouse or civil partner may be able to claim an additional State Pension or a lump sum.
 

How many years National Insurance for full State Pension?

35 qualifying years - this is how many years National Insurance contributions you need to get full State Pension.
 

State Pension age

State Pension age varies depending on when you were born but is expected to increase gradually to 68 by mid-2040. To find out when you’ll be entitled to collect your new State Pension, use the Government’s State Pension calculator.
 

Claiming State Pension

You don’t get your new State Pension automatically, you need to claim it. You should get a letter four months before you reach State Pension age telling you what to do. So, if you’ve not been contacted about claiming it three months before, call the State Pension claim line on 0800 731 7898.
 

State Pension triple lock

The State Pension increases by at least 2.5% a year. But if prices (as currently measured by the Consumer Price Index (CPI)) or earnings (the average percentage growth in UK wages) go up more than this then your pension will go up in line with the highest. This is known as ‘The Triple Lock’.
 

Is State Pension taxable?

HM Revenue and Customs (HMRC) see your State Pension as an income, although you do not pay tax on it directly. If your yearly income goes over your personal allowance (the amount of income you can receive in a tax year before you start paying income tax – the standard personal allowance is £12,570 in the current tax year). The tax due will be taken from any additional income you receive and paid according to the tax bracket you fall into.

Tax in retirement
 

Deferring State Pension

You’re eligible to collect your new State Pension the week you reach State Pension age, but you don’t have to. You can defer the payment of your new State Pension and choose one of these options. If you defer, your new State Pension will increase by 1%² for every nine weeks, that’s 5.8%² for every 52 weeks.

_{2 These figures do not take into account a rise or fall in inflation rates.}

Please visit the government website for more information.

No deferral limit

You can defer the payment of your new State Pension for as long as you want, as currently there are no deferral time limits.

What benefits can I claim with State Pension?

As well as the State Pension you could qualify for other benefits. Some of them depend on your age, others on your income. Together they can go a long way towards meeting the cost of living:

• get help with NHS prescriptions and health costs
• get support with utility bills
• get support with housing costs

Plus, if you already receive benefits such as Pension Credit, you could get more support towards your health costs.

Pension Credit

If you’ve reached State Pension age and have a low income, you could claim Pension Credits to top-up your weekly income.

Please visit the government website for more information.

Claiming Pension Credit can also open up other State benefits.

For your health:

• help with NHS dental treatment
• help towards the cost of glasses
• help with hospital travel costs
• a Cold Weather Payment of £25 when the temperature is 0°C or below for seven days in a row.²

_{2 If you live in Scotland, you can't get Cold Weather Payments. You may get an annual Winter Heating Payment instead.}

If you are severely disabled:

You could get an extra payment if you get any of the following:

• Attendance Allowance
• the middle or highest rate from the care component of Disability Living Allowance (DLA)
• the daily living component of Personal Independence Payment (PIP)
• armed Forces Independence Payment
• the daily living component of Adult Disability Payment (ADP) at the standard or enhanced rate

For your home:

• ground rent if your property is a leasehold
• some service charges
• charges for tents and site rents

The amount you could get depends on your housing costs.

If you get Pension Credit, you could also be eligible for:

• council tax reduction
  
• housing benefit if you rent the property you live in
• support for Mortgage Interest if you own the property you live in

If you’re a carer:

You could be entitled to pension credits if you provide care for:

• another adult and are in receipt of Carers Allowance, a Carers Support Payment, or have claimed Carers Allowance but are not being paid (e.g. you already get another benefit paying a higher amount)
  
• a young person who normally lives with you and is under the age of 20
• a young person who normally lives with you and is over the age of 16, but younger than 20, who is in (or accepted for) approved training such as foundation apprenticeships or a course of non-advanced education (e.g. GSCE or A-Levels)³
• if the young person is disabled, you could get an extra payment.

Please visit the government website for more information.

_{3 If they’re in education, it must be for more than 12 hours a week on average.}

Means tested benefits

Taking a lump sum from your pension pot can affect any means-tested benefits you may be receiving, they could stop or reduce.

Make sure you check to see if taking your pension alters your benefit situation. Visit Pension Wise for more information.

Retirement explained

For more information on managing money in retirement, preparing for retirement and saving for your future visit our retirement explained page to help you understand the basics.