State Pension Q&A
A 5 minute read
You probably know that you get a pension from the government when you retire – but you might not know how much it’s going to be or when you’re due to get it.
More importantly, you might not realise that you don’t just automatically get the whole pension. You need to have paid in enough National Insurance contributions or credits to get the full amount.
Let’s take a look at some questions we’re often asked about what it all means.
Q: What is the State Pension?
A: The State Pension system was overhauled in 2016, so you’ll hear people talking about the ‘new’ and ‘old’ State Pensions. The new state pension is a single payment, while the old system involves a basic State Pension plus an extra payment that some people are eligible for.
If you retired before 6 April 2016, you’ll get the old State Pension. If you retire after 6 April 2016, it’ll be the new State Pension.
Q. How much is the State Pension?
A: The new State Pension is £185.15 a week. This probably isn’t enough on its own, but if you’ve got a workplace pension and other savings or investments, it’s a good boost to your savings.
Q: Who gets the State Pension?
A: It depends on how much National Insurance contributions or credits you’ve paid in over the years. To get the full new State Pension, you need to have paid 35 full years of NI contributions or credits. Each full year is called a qualifying year, and you’ll get more or less from your State Pension depending on how many qualifying years you have. You normally need at least 10 years to get anything at all.
Q: What if I’ve not worked or have taken time out to have children?
A: If you’ve been unemployed, or have taken time out of work because of sickness or as a parent or carer, you might have received National Insurance credits. You might also qualify for a State Pension based on your spouse’s or civil partner’s National Insurance.
Q: When are you likely to get the State Pension?
A: This is different for everyone, depending on how old you are now.
Q: Do I have to stop working to claim the State Pension?
A: No – you can carry on working after you’ve reached the State Pension age, though bear in mind that the State Pension isn’t tax-free. If your total income (including pay, State Pension, private pensions, income from property and so on) is more than your annual tax-free allowance, you’ll have to pay tax on your pension.
Q: What if you’re approaching your state pension age?
A: You should get a letter no later than two months before you reach your State Pension age. This will tell you everything you need to do, as you need to apply for your pension – it doesn’t just automatically get paid.
If you don’t receive a letter, you can still claim – the easiest way is to apply online.
Q: Can you top up or boost your state pension?
A: Yes – if you have gaps in your National Insurance record, you can top it up.
Q: What does contracting out mean?
A: With the old State Pension, you could contract out of the extra part of your pension, which meant you paid less National Insurance. If you were ever contracted out, you’ll get a lower State Pension.
Q: Where can I find out more?
A: For more about the State Pension and how it all works, you’ll find loads of helpful information on Money Helper.
You can also discover more about the old State Pension and the new State Pension on the government’s site: