What is the state pension?
Want to see if you’re eligible to claim your state pension but don’t know how to go about it? Or just not quite sure what the state pension is? Don’t worry – this simple guide to state pensions is sure to put your mind at ease.
The state pension is a weekly payment from the government that you will receive once you reach the state pension age. To qualify for a state pension, you need to have made a minimum of 10 years of National Insurance contributions. However, if you want to receive the full state pension, you need 35 years worth of contributions.
Many people will have gaps in their working record, meaning that they won’t have the full 35 years’ of National Insurance contributions. This may be due to periods of unemployment or illness that prevents them from working, for example. If this is the case, and you do not have enough qualifying years to receive the full state pension, you do have the option of making voluntary contributions to your state pension.
In addition, the state pension is now split into two schemes: the basic state pension, and the new state pension. You can claim the basic state pension if you’re a man born before 6th April 1951, or if you’re a woman born before 6th April 1953. If you were born after these dates, then you’ll be eligible for the new state pension. You can only access your new state pension when you reach the state pension age.
Checking your state pension age
As mentioned above, there are multiple factors in establishing which type of state pension that you’re eligible for. Your state pension age is also important as it determines the earliest age that you can start claiming your pension.
The state pension age varies depending on your age and gender and is currently under review and may change in the future. As it stands, the state pension ages for men and women is as detailed below:
What is the female state pension age?
The female state pension age is currently 65, meaning that you cannot claim your state pension until you reach this age.
What is the male state pension age?
The male state pension age is also 65, but the age is set to increase to 66 for both men and women by October 2020.
Will the state pension age change?
As mentioned above, the state pension age is set to reach 66 for both genders in late 2020, but further changes are also expected in the future as average life expectancy in the UK increases.
A further rise in the state pension age is forecast between 2026 and 2028, meaning that men and women claiming the new state pension won’t be able to do so before the age of 67.
If you want to check when you’ll reach state pension age, this tool from the government can help you. The tool will also tell you:
- Your pension credit qualifying age
- When you’ll be eligible for free bus travel
What is the maximum state pension?
The maximum state pension that you can receive depends on which type you’re eligible for: basic state pension or new state pension.
Maximum basic state pension
The maximum basic state pension that you can receive is £134.25 per week and applies to those who reached the state pension age before 6th April 2016.
It is possible to receive more than this if you have built up some additional state pension over the years. In addition, the basic state pension does increase every year. The increase is determined by whichever of the following is the highest:
- Earnings – the average percentage growth in wages
- Prices – the percentage growth in prices in the UK as measured by the Consumer Prices Index (CPI)
- 2.5% – if neither of the above are higher than this, then the state pension will increase by at least 2.5% each year
This system of ensuring the state pension increases is called the ‘triple lock’. You can find more information about the ‘triple lock’ system here.
Maximum new state pension
The maximum new state pension that you can receive is £175.20 per week and is based on your National Insurance record when you reach state pension age.
Unfortunately, if you are eligible for the new state pension, then you will not be able to claim additional state pension (see below).
What is additional state pension?
The additional state pension, or ‘second state pension’ as it is also known, is a way of adding to your basic state pension.
However, you only qualify for these additional payments if you have a basic state pension, meaning that anyone eligible for the new state pension can’t top-up theirs in this way.
What is the state pension for a married couple?
If you and your partner have reached the state pension age before 6th April 2016 and you both have built up a state pension, then you’re entitled to £268.50 per week – double the basic state pension.
If one partner has yet to build a state pension and the other has, then the partner without a state pension can still claim one based on their partner’s record.
What is the minimum state pension?
There is technically no minimum state pension but, if you have fewer than 30 qualifying years of contributions, then your basic state pension is likely to be less than the maximum state pension of £125.95 per week.
However, you can still top this up through paying voluntary National Insurance contributions. It’s important to note that these voluntary contributions aren’t guaranteed to increase your state pension, so we recommend you get in touch with the government’s Future Pension Centre to see if voluntary National Insurance contributions are the way forward for you.