What do I need to know about the state pension
The State Pension is a regular payment from the Government that you can claim when you reach your State Pension age.
Your State Pension is based on your National Insurance record. It takes into account the National Insurance you built up before the new State Pension was introduced in 2016, as well as contributions and credits since then. So not everyone will get the same amount.
The full amount of new State Pension is currently £168.60 a week – that’s just over £8,750 a year, but it’s important to check your State Pension online. It will tell you the amount you’re predicted to get, and the date you’ll reach State Pension age under the current rules.
However, this amount is probably insufficient for most people to live on and in real terms should only form the foundation for your retirement provisions.
National Insurance contributions.
You need to have paid national insurance contributions for at least 10 qualifying years, these years need to be qualifying years. A qualifying year means a year in which you earn over the Lower Earnings Limit as salary (dividends don't count). How much you receive will also depend on how many qualifying years you have. You need at least 35 qualifying years to qualify for the full amount.
If you check your state pension online it will also show you your National Insurance record, and whether you can improve it. You might be able to fill gaps by claiming National Insurance credits, or making voluntary National Insurance contributions.
You usually need to have 10 qualifying years on your National Insurance record to get the new State Pension, but you should check to see how your circumstances affect your National Insurance record.
What is the state pension?
The full amount of new State Pension is currently £168.60 a week – that’s just over £8,750 a year.
If you reached state pension age before 6 April 2016, you will receive the old state pension instead, which may be a different amount.
When can I start drawing my state pension?
The state pension age is currently 65 for both men and women, but may be different depending on when you were born. Answering the question ‘When will I get my state pension?’ means working it out from the year (and often the month) in which you were born. You can check your state pension age on the government’s website.
From April 2026 the state pension age will begin further increases to 66, and then to 67 by March 2028. It is expected to reach 68 by around 2044.
Work and the claim state pension?
Should you wish you can carry on working and earning once you’ve passed state pension age and began to draw your pension, but you’ll no longer pay National Insurance after this point. However state pension is still considered to be earned income, so could be subject to tax depending on how much other income you continue to earn. You may wish to talk to a financial adviser to make sure you’re not wasting too much of your state pension in tax. It may make sense to scale back your hours or find another solution.
Claiming the state pension from overseas
If you live abroad or are planning to move abroad and want to claim state pension, you’ll need to contact the International Pension Centre. You can then arrange for your state pension to be paid directly into a bank account, either located in the UK or in the country where you’re living now. You can choose to be paid every four or 13 weeks.
Should I delay taking my state pension?
If you choose not to take your state pension from the state pension age, the amount you’re entitled to will gradually rise. For every year you delay it, the amount you can receive will rise by around 5.8 per cent.
You might choose to do this if you were still working and didn’t want to lose state pension money in tax.