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State Pension: Explained

22nd February 2022

Whether you’ve nearly reached State Pension age or are planning in advance for your retirement, knowing what a State Pension is and how to claim it is essential. The State Pension will ensure you have sufficient income to support your retirement.

Here, we cover the basics of a State Pension to help you with your retirement journey.

What is a State Pension?

The State Pension is a regular monthly payment from the government that you can claim once you reach State Pension age.

To be eligible for the State Pension, you need to have made regular National Insurance contributions for a certain number of years. Your National Insurance record determines how much you will get.

For many people, the State Pension only forms a part of their retirement income. They could also receive a workplace pension, other pensions, and/or earnings.

As of 6 April 2016, the new State Pension has been introduced, which is a simplified version of the basic State Pension. The new State Pension affects people who reach State Pension age from 6 April 2016 onwards. This includes men born on or after 6 April 1951 and women born on or after 6 April 1953. If you’re born before these dates, you will be eligible for the basic State Pension.

How is a state pension calculated?

The full amount of the basic State Pension is £137.60 per week in 2021 to 2022. However, many people also get an Additional State Pension, which is calculated based on your earnings throughout your career.

The full amount of the new State Pension is £179.60 per week in 2021 to 2022.

To calculate how much you will get, you can use the Check your State Pension forecast tool on the government website. It’s subject to review and may change in the future.

At what age do I get my State Pension?

Your eligibility for a State Pension depends on two factors: your State Pension age and your National Insurance record.

The qualifying State Pension age is based on the year you were born and sometimes your gender, but not always. According to the latest rules, it can be as low as 65 and as high as 68. It’s subject to review and may change in the future.

You can use the Check your State Pension age tool on the government’s website to calculate your State Pension age.

Additionally, to qualify for a State Pension, you must have made National Insurance contributions for a minimum of 10 years to get the minimum amount of State Pension and a maximum of 35 years to get the full amount of State Pension. The 10 years are cumulative, which means that they don’t have to be consecutive.

How to claim State Pension?

Once you reach State Pension age, you need to apply to claim it, because it won’t be sent to you automatically. If you’re worried that you’ll forget, the government will send you a reminder letter when you reach state pension age.

The government will send you directions in the post, so follow those instructions to learn how to claim. Alternatively, you can apply directly on the UK Government website. The process is slightly different for those who live in Northern Ireland – find out more here.

You don’t have to claim your State Pension as soon as you reach State Pension age. You can defer claiming it, which will increase the amount you get. The more you defer it, the more you will get.

You can only defer your pension every nine weeks. For every nine weeks you defer claiming, your State Pension will increase by 1%. If you defer for a year, it will increase by just under 5.8%. After you claim it, the additional amount will increase each year depending on inflation.

Deferring your state pension will not increase if you are claiming certain benefits, so check if this applies to you.

What is Pension Credit?

Pension Credit is a benefit that helps you with your living costs if you’re over State Pension age and on a low income.

If you have a partner, you can be eligible for a Pension Credit if either:

  • Both you and your partner have reached State Pension age
  • One of you is getting Housing Benefit for people over State Pension age

Your Pension Credit tops up your weekly income to £177.10 if you’re single, and your joint weekly income to £270.30 if you have a partner.

Even if your income is higher, you might still be eligible for Pension Credit if you have a disability, you care for someone, you have savings, or you have housing costs.

Pension Credit can help you get other benefits, too, including Housing Benefits, support for Mortgage Interest, Council Tax reduction, a free TV licence, if you’re aged 75 or over, help with NHS healthcare, and help with your heating costs.

You can apply for Pension Credit by post, by phone, or online. Your application process can start up to four months before you reach State Pension age. You can also apply any time after you reach State Pension age, but bear in mind that your application can only be backdated by 3 months.

The State Pension is an essential part of your retirement. Make sure you follow the processes outlined by the UK government to ensure you get the most of it.


Reference – BL138 – Feb – 2022

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