Finding your way around the State Pension maze can be really daunting, but it’s vital to try to get to grips with the basics so you know how much you could be entitled to.
The new State Pension age rose to 66 for both men and women on 6 October 2020, so applies to anyone born after 5 October 1954. It is due to increase again to 67 between 2026 and 2028, and again to 68 between 2037 and 2039.
The women’s State Pension age rose to 65 in 2018, and has now also increased to 66 to bring it in line with men. This has caused huge hardship for many women who assumed they’d be able to stop work at the age of 60. You can read about their battle to obtain compensation in our article Latest WASPI news: women affected by State Pension changes owed compensation, says Ombudsman.
Not everyone gets the same amount from the State Pension – the amount you’ll get will depend on your National Insurance Contribution record, and whether you decide to claim it as soon as you can, or to defer it for a while.
Here’s what you need to know.
If you’re thinking about getting professional financial advice, you can find a local financial adviser on VouchedFor or Unbiased.
Alternatively, if you’d like advice on your private pension, we’ve partnered with independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Please note that Fidelius can discuss private pensions, but is not able to advise on the State Pension and defined benefit / final salary (e.g. NHS) pensions.
Contents
- The type of State Pension you’ll get depends on when you were born
- How the new State Pension works
- How much State Pension will I get if I have never worked?
- What if my State Pension is not enough?
- The basic State Pension explained
- The Additional State Pension
- What is the tax on my pension?
- Remember to claim
- What happens to my State Pension when I die?
- Could you have missed out on some of your Pension?
The type of State Pension you’ll get depends on when you were born
There are two types of State Pension, and which one you’ll get depends on when you were born.
- If you’re a man born on or after 6 April 1951, or if you’re a woman born on or after 6 April 1953 new State Pension rules will apply to you.
- If you’re a man and were born before 6 April 1951, or if you’re a woman born before 6 April 1953, you’ll likely be claiming the basic State Pension already.
How the new State Pension works
The new State Pension applies to those reaching retirement age on or after 6 April 2016 and is £221.20 a week in the current 2024/25 tax year. Each tax year, the new State Pension usually increases by the highest of the growth in wages, inflation as measured by the Consumer Prices Index (CPI), or 2.5%. This is known as the ‘triple lock guarantee’.
The State Pension increased by 8.5% in April 2024, in line with wages growth, rising from £203.85 to £221.20 a week. Despite this increase being a help to many, retirees will still face pressure from steep living costs. Find out more in our article What is the pension triple lock?
| Tax Year | New state pension (weekly) | New state pension (annual) |
| 6 April 2022 – 5 April 2023 | £185.15 | £9,627.80 |
| 6 April 2023 – 5 April 2024 | £203.85 | £10,600.20 |
| 6 April 2024 – 5 April 2025 | £221.20 | £11,502.40 |
You’ll only be eligible for the maximum new state pension if you’ve made 35 ‘qualifying years’ of National Insurance Contributions, and you’ll usually need at least 10 ‘qualifying years’ on your National Insurance record to get any State Pension.
However, it’s worth noting that having 35 qualifying years will only result in your receiving the full new State Pension if you have no National Insurance record prior to the 2016/17 tax year. Most people will have made, or been credited with, National Insurance contributions before 6 April 2016, in which case transitional arrangements apply, so as not to disadvantage those who reached pension age before the new State Pension was introduced. This means that it is relatively common for people with more than 35 qualifying years not to receive the full amount (as the changes only came into effect from 2016/17).
You’ll get qualifying years every year you’re in work, earning above a minimum amount (£242 a week in the 2024/25 tax year) or if you’re paying voluntary National Insurance contributions. You may still get a qualifying year if you earn between £123 and £242 a week from one employer.
You can also get National Insurance credits if you’ve taken time out of your career to bring up children or look after someone who’s ill or disabled.
Class 2 National Insurance contributions were abolished in April 2024. Previously, the self-employed paid both Class 2 and Class 4 National Insurance contributions when their profits rose above £12,570.
If you were contracted out of the Additional State Pension then this will also reduce the starting amount you receive under the new State Pension, as you will have paid lower rates of contributions during your qualifying years. If you’re unsure whether you were contracted out, you can ask your pension provider, or check your old payslips – if the National Insurance contributions line has the letter D or N next to it, then you were contracted out. If it is the letter A, then you were not contracted out. Find out more about contracting out and the Additional State Pension in our guide What is a SERPS pension?
You can find out how much State Pension you’re on track to receive by requesting a State Pension statement.
What is my State Pension age?
You can find out when you’re eligible to claim your State Pension here. Bear in mind that the State Pension age is under review and is gradually being pushed back so that it’s in line with rising life expectancy. It’s due to increase to 67 by 2029 and then again to 68 between 2037 and 2039.
How much State Pension will I get if I have never worked?
As mentioned, to be eligible for the minimum State Pension you need to have at least 10 years’ worth National Insurance contributions, which you would usually get if you have been a paid employee earning more than £123 and £242 a week. However, if you have never worked, then you wouldn’t have gained National Insurance this way, but you might have got National Insurance credits if you’ve claimed child benefits, Jobseeker’s Allowance, Employment and Support Allowance or Carer’s Allowance.
If you claimed any of these benefits for at least 10 years then you should be eligible for some pension, with the amount you are entitled to relating to the number of years you have National Insurance credits for. If you have less than 10 years of National Insurance credits or contributions, you won’t usually be eligible for any State Pension.
What if my State Pension is not enough?
If you’ve requested a State Pension Statement and the forecast isn’t what you’d hoped for, there are various ways you may be able to increase the amount you receive at retirement, including:
Buying extra years
If you’re missing some NI qualifying years, you can buy extra years by making what are known as ‘voluntary class 3 NI contributions’ to make up your record.
You can buy up to 10 years’ contributions and the rate is £17.45 per missing week of NI contributions in the 2024/25 tax year, so it’d set you back £907.40 for a full year. This will boost your pension by just over a fiver a week, or around £302 a year.
Be aware that there is a time limit for paying back qualifying years. You can usually only make up gaps from within the previous six years, and you may need to pay a higher rate for gaps from over two years ago. It’s worth noting that when the new State Pension was introduced, it was made possible to buy back years from as long ago as 2006, but you’re only able to do this up until 5 April 2025.
Deferring the new State Pension
You don’t have to start claiming your new State Pension as soon as you reach State Retirement age.
You can defer it if you want to, which will mean you end up with a higher pension when you do start claiming it. It will increase every week you defer, as long as you defer for at least nine weeks.
For each year you defer, you’ll get just under a 5.8% increase in your new State Pension. So, for example, if you deferred your pension for 52 weeks, you’d get an extra £11.78 a week (just under 5.8% of £203.85).
However, if you’re claiming certain benefits, you can’t get any extra State Pension and deferring might also affect the amount you can claim. Find out more about deferring State Pension in our article linked here. Get in touch with the Pension Service if you need further help or guidance.
The basic State Pension explained
The most you can get from the basic State Pension in the 2024/25 tax year is £169.50 a week.
| Tax Year | Basic state pension (weekly) | Basic state pension (annual) |
| 6 April 2022 – 5 April 2023 | £141.85 | £7,376.20 |
| 6 April 2023 – 5 April 2024 | £156.20 | £8,122.40 |
| 6 April 2024 – 5 April 2025 | £169.50 | £8,814.00 |
You’ll only get this amount if you’ve got a total of 30 qualifying years of National Insurance contributions or credits. If you don’t have 30 qualifying years, you may be able to pay voluntary National Insurance contributions so that you can claim the maximum basic State Pension.
Deferring the basic State Pension
If you’re under the old system and have chosen to defer your pension, you’ll get a 10.4% increase in your pension for each year you defer, as long as you defer for at least five weeks.
The Additional State Pension
If you’re a man born before 6 April 1951 or a woman born before 6 April 1953, then you might be entitled to an Additional State Pension (also known as State Earnings-Related Pension Scheme or SERPS) on top of your basic State Pension. This is usually paid automatically with your basic State Pension if you qualify for it, unless you’ve previously chosen to contract out of it.
The amount you’ll get depends on the number of years you paid National Insurance for, your earnings, and whether you topped up your basic State pension (which it was only possible to do between 12 October 2015 and 5 April 2017), but the maximum you can get in addition to your basic state pension is £218.39 in the 2024/25 tax year.
Again, you can find out how much you might be able to get from the Additional State Pension by requesting a State Pension statement.
Before April 2016, it was possible for employees to contract out of the Additional State Pension. This meant paying lower or redirected National Insurance contributions over the years and effectively accepting lower or zero Additional State Pension as a result. If you did contract out of the Additional State Pension, then when you retire, you’ll instead get a contracted-out pension from your employer’s workplace pension scheme. This is typically the same as or more than you would have got if you didn’t contract out, although the actual amount you’ll get will depend on how your pension has performed. Find out more in our article State Second Pension and SERPS explained.
Graduated Retirement Benefit
Prior to the introduction of SERPs, the Graduated Retirement Benefit scheme provided earnings related pensions on top of the Basic State Pension. This scheme ran from 1961 to 1975. Only those who reached State Pension age before 6 April 2016 will ever receive Graduated Retirement Benefit.
Anyone reaching State Pension age after this date won’t receive any Graduated Retirement Benefit because they’ll get the New State Pension – but the amount of any Graduated Retirement Benefit built up will be factored in when calculating their entitlement to the New State Pension.
What is the tax on my pension?
Your State Pension is paid to you before any tax is taken off (this is known as being paid gross). The amount you can earn tax-free each year, known as your personal allowance, is £12,570 in the 2024/25 tax year (unchanged from the 2023/24 tax year), meaning that if the State Pension is your only source of income, you won’t have to pay any tax on it.
However, if you have other income coming in, perhaps from an employer or from other pensions, and this income is more than your personal allowance, you’re liable to pay income tax on any amount above the allowance. Different rates of income tax apply depending on the type of income and how much it is.
Either your employer or pension provider will need to take income tax off the amount they pay you, as well as any tax due on your State Pension. They’ll usually pay this to the taxman on your behalf. If you’re not working, but have pensions from more than one provider, such as a personal pension and a workplace pension, HMRC will ask one of these providers to deduct tax due on your State Pension.
If you plan to keep working beyond your State Pension age, then the tax impact of claiming your state pension, alongside receiving other paid income, may be a factor worth considering when making a decision on whether or not to defer taking your State Pension.
You can find out more about how your State Pension is taxed from the Pensions Advisory Service.
Remember to claim
Many people forget that you don’t get your State Pension automatically – you have to actively claim it. You’ll usually be sent a letter a couple of months before you reach State Pension age which will tell you what to do. If you haven’t received a letter for some reason, or if you have misplaced it, you can also claim your State Pension online or over the phone. And remember – you can still claim your pension (or choose to defer it), even if you want to continue working.
What happens to my State Pension when I die?
When you die then your spouse or civil partner may be able to claim your State Pension. Other beneficiaries are not eligible to inherit State Pensions, and you must have been married or in a civil partnership when you died in order for them to be eligible to claim.
Your partner should contact the Pension Service to let them know you’ve passed away and find out how much they are entitled to.
If you reached the State Pension age before April 6, 2016 and currently receive Basic State Pension then your partner will be able to claim your Additional State Pension. They may also be able to claim your State Pension as a lump sum if you deferred claiming it.
If you reached, or expect to reach, the State Pension age after April 6, 2016 and receive, or will receive, the new State Pension then your partner may be able to claim an extra payment on top of your pension.
Could you have missed out on some of your Pension?
Thousands of mothers could be out of pocket after mistakes were made in their national insurance records by HMRC, which led to their State Pension entitlement being incorrectly calculated.
The errors affect women who have taken time off work to raise children since 1978, and were highlighted in the DWP’s July 2022 annual report. Read more and find out how to claim money owed in our article Thousands of mothers could be owed State Pension back payments.
The issue follows the scandal surrounding underpayment of the State Pension to married women and widows who claimed their State Pension before April 2016. Those in this group may have been short-changed their State Pensions due to government errors and are set to receive £3 billion over the next six years.
Some of those who are entitled to a higher State Pension weren’t aware that they could claim extra when their husband reached the age of 65. There are also many women who haven’t received the money they’re entitled to because government computers failed to award them the correct amount.
Consultancy Lane Clark and Peacock has set up a useful calculator to help married women identify if they have been underpaid. You need to enter a few basic details, such as you and your husband’s ages and how much State Pension you each currently receive, and the calculator will let you know if you might be getting less than you’re entitled to.
If you think you have been underpaid, get in touch with the Pension Service and ask if you’re owed any back payments. If you are, request that these are paid to you with interest added. You can contact the Pensions Service by telephone on 0800 731 0469 or find out more here. Read more in our article Women owed £3 billion in backdated State Pension payments.
If you’re thinking about getting professional financial advice, you can find a local financial adviser on VouchedFor or Unbiased, or for more information check out our guide on How to find the right financial adviser for you.
Alternatively, if you’d like advice on your private pension, we’ve partnered with independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor.
Fidelius are rated 4.7 out of 5 from over 1,250 reviews on VouchedFor, the review site for financial advisors. With your free consultation, there’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Please note that Fidelius can discuss private pensions, but is not able to advise on the State Pension and defined benefit / final salary (e.g. NHS) pensions.
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