The State Pension is a key part of the UK’s welfare system, designed to protect those over working age from poverty and reward decades of working life. It is unlikely to be enough for most people to live off alone, but can combine with a private pension to form a healthy retirement income. However, the specifics of the UK State Pension can sometimes be confusing. The amount that is paid out changes every year, while the exact age you can claim it will vary – and may change further in the future.
In this article we explain how the State Pension works in the UK – including significant changes made in 2016 – and when you might be able to start claiming. We also cover how much you can earn and what you need to do to make sure you are getting the full amount you are entitled to.
We recommend that you read the review in full however you can jump to specific sections of this article using the following links:
- What is the State Pension?
- How much State Pension will I get?
- How much is the State Pension for a couple?
- How is the State Pension calculated?
- The New State Pension
- The Basic State Pension
- When will you get your State Pension?
- How to claim the New State Pension
- How to boost your State Pension
- Will your State Pension increase with inflation?
What is the State Pension?
The State Pension is a regular income provided by the government. Most people will be able to claim it once they reach a certain age, known as the State Pension age, until they die. Payments are usually made every four weeks.
The payments are unlikely to be enough to meet all of your expenses in retirement – though that will depend on how much you spend every month – so you will likely need a workplace or personal pension as additional retirement income.
How much State Pension will I get?
The amount you get from your State Pension will depend on how many years of National Insurance Contributions (NICs) you have made or been credited with. You pay NICs once you are over the age of 16 and earning more than £242 a week, or £6,725 a year if you are self-employed.
Under the New State Pension, which came into effect on 6 April 2016, workers will need to have made NICs in 35 separate tax years in order to be eligible to claim the full amount. This varies from the previous system, now known as the Basic State Pension, under which you needed 30 years of contributions. The minimum number of contribution years to be entitled to any State Pension amount is 10.
Any gaps you have in your National Insurance record – created by taking a year off work, for example – can be filled through voluntary contributions. This is when you pay NICs separately from your Income Tax obligations. You will need to log into the government's online State Pension portal in order to see how many years of contributions you have paid and how much it will cost to fill in any gaps. We have more information in our article 'How to fill gaps in your National Insurance record to boost your state pension'.
People who are unable to work for certain reasons – for example due to caring responsibilities, or an illness or disability – can top up their National Insurance record through the National Insurance credit system. This is designed to help those unable to work to fill any gaps in their record that might restrict claiming benefits – including the State Pension – in the future. You can also get National Insurance credits if you are registered for child benefit, even if you are not actually eligible to be paid any money. Registering is the only way of showing that you are not working because you are looking after a child under 12 years old, which qualifies you for National Insurance credits.
Basic State Pension
The state pension you will receive will depend on whether you reached retirement age before or after the New State Pension was introduced in 2016. People who reached State Pension age before 6 April 2016 will claim the Basic State Pension. Below we summarise the Basic State Pension figures for this year, last year and the year before.
|Per Week||Per Month||Per Year||Increase from previous year|
New State Pension
People who reach the State Pension age after 6 April 2016 – essentially men born on or after 6 April 1951 and women born on or after 6 April 1953 – will claim the New State Pension. Workers who have paid the full 35 years of NICs can receive the full amount. Below we summarise the New State Pension figures for this year, last year and the year before.
|Per Week||Per Month||Per Year||Increase from previous year|
The amounts above can be further topped up by the Additional State Pension, also known as the State Second Pension or SERPS. The scheme is no longer active, but it will affect your pension if you paid into it during your working life. This might mean that you are paid more than the full level of the New State Pension. We explain more in the following section.
Additional State Pension
Also known as the State Second Pension or SERPS, the Additional State Pension was a way to top up the full Basic State Pension amount. It was a government scheme workers could pay into in order to boost their retirement income. You can no longer pay into the Additional State Pension, but you can be paid it alongside the Basic State Pension if you retired before 6 April 2016 and paid in during your working life.
If you retired after 6 April 2016, you can also be paid what is called a ‘protected payment’. This is a top up to your New State Pension payments designed to make sure you are not getting less money than you would have under the old rules. A protected payment increases each year in line with the CPI (consumer price index) rate of inflation.
Exactly how much you get in either case will depend on how long you paid into the Additional State Pension while you were working and in what period. Some workers will have contracted out of the scheme, which means they will be paid less. Others might be paid more as the final amount is dependent on how much your were earning while you were paying into the Additional State Pension.
How much is the State Pension for a couple?
There are no longer special rules in place for married couples claiming the New State Pension. Each partner must build up their own qualifying years in order to claim the full New State Pension. Couples who have both built up the full number of qualifying years of National Insurance Contributions (NICs) would be paid double the single person rate between them, so effectively the same amount as a non-married person.
However, there are a couple of exceptions for people claiming the Basic State Pension. If you are a married woman without a full number of qualifying years – for example because you paid the reduced ‘married woman’s contributions’ – whose spouse retired before April 2016, you may be able to claim a higher State Pension based on their contributions. Your payments should be an amount equivalent to 60% of the State Pension payments due to your spouse.
If your spouse or civil partner dies, you may be able to increase your State Pension payments through inheriting their Additional State Pension. If you divorce or dissolve a civil partnership, you can be ordered to share your Additional State Pension with your partner.
How is the State Pension calculated?
Your State Pension is calculated by the Department for Work and Pensions (DWP) using a formula that takes into account how many years of National Insurance Contributions (NICs) you have paid, how long your contracted-out periods have lasted and the amount of Additional State Pension you are due.
Contracted-out periods are stretches of time in which workers were able to opt-out of paying into an Additional State Pension, usually in order to pay more into a workplace or personal pension. This option was removed as part of other State Pension changes in 2016, but remains relevant for people claiming the Additional State Pension.
The calculations used to work out your UK State Pension amount depend on when you reached State Pension age. Workers reaching the pension age since 6 April 2016 will fall under the new rules and claim the New State Pension. If you reached State Pension age before 6 April 2016, your amount is based on the old rules and you will claim the Basic State Pension.
For the New State Pension, calculating how much you are due can be quite simple. If you have never had a contracted-out period or accrued any Additional State Pension, all you need to do is divide the full State Pension amount by 35, then multiply it by your amount of qualifying National Insurance contribution years.
For example, if you have 30 years of NICs, your calculation would be as follows:
£203.85 (the full level New State Pension amount for the 2023-24 tax year) ÷ 35 (the number of National Insurance contribution years required to claim the full amount) x 30 (your years of NICs) = £174.72 a week.
The New State Pension and the Basic State Pension
In the UK, the State Pension is split into two main types. This is because of a rule change that was introduced with the aim of simplifying the UK’s pension system that took effect on 6 April 2016. If you reach State Pension age after this date, you will need to claim the New State Pension. Workers who reached the State Pension age before this date are paid by the old system, known as the Basic State Pension.
The New State Pension – 2023/24
To earn the full New State Pension, workers will need to have 35 qualifying years of National Insurance Contributions (NICs). If you have fewer than 35 years of contributions, you will receive a lower amount of money. You will need at least 10 years to get anything at all.
Gaps in your National Insurance record can be filled through voluntary contributions or through National Insurance credits. The National Insurance credit system is designed to help people who cannot work, maintain their National Insurance record and claim State Pension when they retire. However, not every reason for not working will qualify you for credits.
The full New State Pension for the 2023/24 tax year is £203.85 a week (£883.35 a month, or £10,600.20 a year).
The Basic State Pension – 2023/24
This is the old system of paying the State Pension, but it still applies to people who reached State Pension age before 6 April 2016.
You will need to have 30 years of National Insurance payments to qualify and you can top the standard amount up with payments from an Additional State Pension.
The Basic State Pension is paid out at £156.20 a week (£676.86 a month, or £8,122.40 a year) if you have the full 30 years of National Insurance payments. If you have less, the payment reduces by 1/30th for each year under 30.
When you will get your State Pension
The date you are eligible to claim the State Pension will depend on the year you were born. In the table below we summarise the state pension age based on qualifying birth dates.
|Date Born||State Pension Age|
|Before October 1954||60-66|
|6th October 1954 - 5th April 1960||66|
|6th April 1960 - 5th April 1977||67|
|After 6th April 1977||68|
The UK Government is considering bringing forward the birth date required for a State Pension age of 68 and it is possible other changes may occur in the future too. If you are a considerable number of years away from your current retirement age, there is the potential for it to go up as you get older – a decision usually justified by the UK average age rising.
You can ‘Check your State Pension age’ here.
How to claim the State Pension
You will not be paid the state pension automatically once you reach the qualifying age. Instead you will need to claim it, which is most easily done online. The DWP should send you a letter no later than two months before you reach the State Pension age, outlining how to claim the State Pension payments you are entitled to. However, you can make a claim online before you receive the letter, as long as you are within 3 months of reaching your State Pension age.
You can also call the Pension Service or write to Pension Service 8, Post Handling Site B, Wolverhampton, WV98 1AF to make a claim.
Paying tax on your State Pension
The State Pension is considered earned income for tax purposes, which means that it counts towards your total annual income. No tax is deducted before you are paid your State Pension, unlike with some private pensions. If you earn more than the Personal Allowance, you will need to pay tax on the income over the threshold. The standard Personal Allowance for the tax year 2023/24 is £12,570, which is more than the full New State Pension and the Basic State Pension. Therefore if your only income is your state pension, you will not need to pay income tax on that amount. You will also no longer need to make National Insurance Contributions (NICs) once you reach State Pension age.
How to boost your State Pension
It is possible to boost your State Pension in order to earn more in your retirement. The most obvious way is to make sure you are earning the full State Pension amount by topping up your National Insurance Contributions (NICs). To receive the full New State Pension, you will need 35 years of NICs. You can fill any gaps in your record by paying voluntary NICs. It is possible to view your NICs record on the HMRC website and make any payments you need to bring your total up to 35.
You can also apply for National Insurance Credits to fill any gaps in your record that are there because you were not working for a period of time.
You may also be able to qualify for Pension Credit if you have a low income. This will boost your weekly income to £201.05 if you’re single, or your joint weekly income to £306.85 if you live with a partner. You can find out more about Pension Credit eligibility here.
Your weekly pension will go up if you defer it by at least nine weeks. For each nine week period, the amount you are eventually paid for the New State Pension will rise by 1%. The extra amount is paid to you alongside the State Pension when you do start claiming it.
If you reached State Pension age before 6 April 2016, you could be eligible to benefit from an increased Basic State Pension based on a current or former spouse or civil partner’s NICs.
You can check your State Pension forecast on the government website to find out how much State Pension you will be due, when you will be able to claim it and what steps you can take to increase your payments.
Additionally, pensioners currently receive benefits in the form of the Winter Fuel Payment and the Pensioner Cost of Living Payment. The Pensioner Cost of Living Payment is worth between £150 and £300 until 2023, while the Winter Fuel Payment is between £250 and £600. These are designed to help pensioners pay heating bills in the winter months.
Check out our article 'How to boost your state pension' for further tips and advice.
Will my state pension increase with inflation?
Introduced in 2010, the triple lock is a guarantee from the UK Government that State Pension payments will continue to go up. It is called the triple lock because it ties payments to whatever is the highest of three figures: average earnings growth, the CPI rate of inflation or 2.5%.
Despite the triple lock being considered a safeguard for State Pension payments, it could be overturned in the future and can still be altered by the current party in power. For example, the government suspended the triple lock commitment for 2022. This was justified by the effect the Coronavirus Job Retention Scheme had on average earnings figures, which would have required State Pension payments to rise by 7%. Instead, the government used the highest of the other two figures – the CPI and 2.5% – which in this case was the CPI rate of 3.1%. The triple lock guarantee was honoured for 2023/24, with state pensions rising by 10.1% in April 2023.