How do I qualify for a state pension?

Most of us will expect to receive a state pension when we retire. The system, who qualifies and how much you will receive can be complicated so it makes sense to understand what you will be entitled to.

When you will receive the state pension depends on the date you were born, how long you have been in employment and how many years of National Insurance payments you have made. Your gender can also make a difference depending on your age and when you retired.

What is the state pension?

The state pension is a regular payment received from the government to people in later life. Payments are made weekly and you can still get them if you have other income such as a personal or workplace pension.

You can also continue working and receive the state pension. If you choose to do so, you’ll no longer pay National Insurance contributions after you reach state pension age but you may still be taxed on your income.

The most recent major change to the state pension system occurred in 2016. The introduction of the so-called ‘flat-rate pension’ only applies to those people who reached the qualifying age on or after the 6th of April 2016. Anyone to who this does not apply remains unaffected by the changes.

There are no longer any special state pension arrangements for married couples. Now each spouse or partner in a civil partnership needs to build up their own National Insurance contributions. It is not possible for either spouse or partner to benefit from the other’s pension payments. Pensions also cease when someone dies.

At what age will I receive the state pension?

The official retirement age has gradually increased in recent years. This is in response to people living longer meaning the government has to pay a pension to more people and for extended periods of time.

Since April 2020, the state pension age has been 66. It is intended to further rise to 67 by 2029 and to 68 between 2037 and 2039. The full timeline for this is yet to be published. The state pension age used to be 60 for women. This was increased to 65 between 2010 and 2018. The qualifying age is now 66 for both men and women.

How do National Insurance payments affect the state pension?

How much state pension you will receive depends on how many years of National Insurance contributions you have made. To claim the full state pension, you will have had to have made 35 years worth of National Insurance payments if you retired post-April 2016. This increased from 16. If you retired before 6th April 2016, you will need to have paid the following:

• If you reached state pension age on or after 6th April 2010 - 30 years.
• If you retired before 6th April 2010 - 44 years for a man and 39 years for a woman.

Those with fewer than 35 years but who have still paid for 10 years also qualify for the state pension but receive a lower amount. This may have been due to raising a family, caring for someone or being in full-time training for a period. Once you reach 10 years of National Insurance contributions, you will receive 10/35ths of the total state pension. The 10 years do not have to have been consecutive ones.

If you have gaps in your National Insurance payment history, you can pay voluntary contributions to build up a full entitlement. You can check how many years of qualifying payments you have made on the government’s website or by phoning the National Insurance helpline on 0300 200 3500.

Qualifying for the state pension whether you’re working or unemployed

If you are working, a qualifying year counts towards the state pension, if:

• You earn over £9,880 a year. This will rise to £12,570 in July 2022.
• You earn less than £9,880 but more than £6,396 you won’t pay National Insurance but you will still get a qualifying year.
• You're self-employed and paying National Insurance contributions.

If you’re not working or have had a period of unemployment, you will receive National Insurance credits if:

• You have been out of work due to unemployment, illness or maternity leave.
• You’re the parent of a child under 12 for whom you claim child benefit.
• You are or were a carer for someone who is ill or disabled or received Carer’s Allowance.
• You are or were a foster carer.

Can I receive more than the standard state pension rate?

Under the previous state pension rules, workers were able to build up an additional state pension. This is often referred to as SERPS or S2P - state earnings-related pension scheme. This was a top-up option to the basic state pension but was scrapped in 2016. Some people have been able to keep their existing entitlement built up under the SERPS system.

You can still boost your state pension by opting to defer it or by buying extra years. You can delay receiving your state pension and get larger payments at a later date. This can be useful for example if you are still working. Buying extra years involves paying 'voluntary class 3 NI contributions'. This can be helpful if you’re missing some National Insurance qualifying years.

Either option needs careful thought to ensure you choose a route that works out best for your circumstances. Getting some independent advice is usually a good idea - as it is with any pension-related issue or decision.

How do I claim the state pension?

You don’t receive the state pension automatically so you will have to apply to claim it. You will receive a letter reminding you to claim. The letter should arrive no later than two months before you reach state pension age. You can apply for the state pension online or by telephoning the Pension Service to have them send you a claim form (0800 731 7898).