If you're looking ahead to retirement, it's crucial to know how much state pension you will get.
While a comfortable retirement is likely to hinge on your workplace pension pot and whether you have a SIPP, the sums you get from the state pension can provide a useful boost. What you might not realise is that the amounts on offer vary widely from person to person.
Data from the Department for Work & Pensions shows the number of people on state pension rose 140,000 to a total of 12.6 million in 2022, compared to the previous year. But what these people actually receive hinges on several factors, such as their age and how many National Insurance contributions they've made.
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Attempting to calculate how much you'll get is also made harder by the triple lock. This government policy means the amount the state pension goes up each year is unpredictable. There are also fears about the policy's future, and whether it could expose millions of retirees to income tax in the near-future.
What we do know is that the state pension is likely to rise 4% (£460 a year for those on the new state pension) in spring 2025. This figure has come thanks to recent wage growth data. Labour is expected to confirm this increase in the October Budget.
So, how can you work out what your state pension entitlement will be - and can you boost the size of your retirement fund? Here's everything you need to know.
How does the state pension work?
Understanding how the state pension is calculated is crucial when it comes to working out what your entitlement could look like. The amount you receive comes down to the number of years of recorded National Insurance contributions (NICs) you have.
If you're employed, your employer will have paid NICs on your behalf out of your wages. You can also top up your NICs record, while some people - like carers - can get National Insurance credits.
Your NICs go into a national ring-fenced pot from which the state pension is paid. When you retire, you will receive an amount of state pension that's proportionate to what you've put in or received in credit (more on this below). There are concerns that this pot is coming under pressure due to an ageing population and recent big rises to the state pension.
This system is rather different from the way a personal pension works. Workplace pensions, ISAs and SIPPs depend on the performance of the stocks and shares you have invested in, as well as whether you opt to access that pot through drawdown or by purchasing an annuity.
There are currently two state pensions in the UK. The one you will get will depend on when you were born:
Basic state pension
The old, basic state pension applies to men born before 6 April 1951 and women born before 6 April 1953. So, those who are eligible will have already hit state pension age (which currently stands at 66).
The full basic state pension is worth £169.50 per week, and is guaranteed to rise at least 2.5% each year due to the triple lock. To access this full amount, you need 30 qualifying years of (NICs).
Having more than 30 years of NICs will not entitle you to a higher pension payout. If you don't have 30 years of contributions, the amount you will get will reduce by 1/30th for each year below 30 on your record. So, if you have 20 years of NICs, you will receive 20/30ths of the full amount (£113 a week).
New state pension
The basic state pension has been replaced with the new state pension, and it works in much the same way in that the amount you get is determined by how many years of NICs you have.
It is open to men born on or after 6 April 1951, and women born on or after 6 April 1953. Unlike the basic state pension, you have to have 35 years of NICs to get the full amount, and at least 10 years to qualify for it at all.
The current maximum you can get is is £221.20 per week (around £11,502 a year). This rises by at least 2.5% each year thanks to the triple lock.
The amount you get will be proportionately lower if you have between 10 and 34 years of contributions on your record. For example, if you have 20 years of NICs, you will get 20/35ths of the full amount (£126.40 a week).
How much state pension will I get?
To be eligible for anything from the new state pension, you need to have a minimum of 10 years’ NICs.
If you made NICs before 6 April 2016 ‒ when the basic state pension was replaced with the new state pension ‒ then these are used to work out a ‘starting amount’. This will be either how much you would have got under the old state pension rules, or what you’d get if the new state pension had been in place throughout your working life - whichever is higher.
Each year of contributions after 6 April 2016 will add around £5 to your state pension, until you reach the current maximum of £221.20. You can get a pensions forecast from the government showing how much state pension you will get, through the Gov.uk website. You will need to register for the Government Gateway to use the state pension forecast tool.
What counts as National Insurance contributions for the state pension?
National Insurance contributions are paid once you are 16 or over and start earning above a particular threshold. For employees, that threshold is earning over £242 a week, while for the self-employed they are classed as being paid once they make a profit of above £12,570 per year.
Many people have gaps in their National Insurance record. For example, if you've taken time out of your career to raise kids, care for a loved one, or go back into education, you may not earn enough to boost your record.
However, you may qualify for National Insurance credits, which can help you to plug some of these gaps. Credits may be available if you are unable to work due to ill health, or because you are unemployed, or you are caring for someone.
Credits are also applied automatically if you receive child benefit, something many parents are missing out on. You can find out more about eligibility for National Insurance credits on the Gov.uk website.
Can I top up my state pension?
If you have gaps in your National Insurance record, and don’t qualify for National Insurance credits, then you can make voluntary NICs. This can boost your overall record and increase the size of the state pension you will receive in retirement.
Buying a full year of NICs currently costs just over £907, while partial years are cheaper. For each year you buy you get an extra 1/35ths state pension – which is £302 a year - or £6,052 over 20 years. This means that, as long as you live at least three years after the official retirement age, you’ll get your money back.
This system is good value when you consider that the state pension rises each year depending on whichever is the highest of 2.5%, wage growth or CPI inflation, thanks to the triple lock. In essence, the state pension becomes more valuable over time.
You can usually buy voluntary National Insurance credits for the previous six tax years. But there is currently a special window that will allow you to go back to 2006. The deadline to take advantage of this opportunity is 5 April 2025.
It is really important to check with the Department for Work and Pensions whether you will benefit from buying voluntary credits as there may be cases where buying the extra credits does not boost your state pension. The government has launched a new digital Check Your State Pension forecast service that it claims will make it easier for people to boost their National Insurance record. So, it's worth checking this out.
What does the triple lock mean for the state pension I receive?
The state pension triple lock was introduced under the coalition government in 2011, and is a way of ensuring that pensioners receive a meaningful increase to their state pension each year.
Under the triple lock, the state pension increases at the start of each new tax year by the largest of the following three figures:
The triple lock was paused for one year after the pandemic due to fears that there would be a surge in wage growth as people went off furlough. However, it has since been restored.
In April 2024, the full new state pension rose 8.5% from £203.85 to £221.20 per week, an increase of £17.35. The 8.5% rise reflects the 8.5% growth in earnings recorded over the summer of 2023.
A pensioner receiving the full amount will therefore currently get an income of £11,502 in 2024-25. It means any retirees who earn around £1,000 in extra cash from part-time work or hobbies will have to pay income tax. This is because the tax's thresholds have remained static since 2021, while the state pension has increased significantly.
While it's good news for pensioners, the triple lock is controversial. For one, it's expensive for the government to maintain, and it can mean that pensioners receive big increases at a time when workers and the young are struggling.
Helen Morrissey, head of retirement analysis at the investment platform Hargreaves Lansdown, says the spiralling cost of the state pension means there should be a proper review into the future of the triple lock. This would put an end to the rumours and worries that the government may change or axe it each year.
She said: “The triple lock has played a role in supporting pensioner incomes over the past decade but this needs to be balanced with the needs of the younger working population. The state pension forms the backbone of people’s retirement planning, and they need some certainty on when they will receive it. We need to see a wide-ranging review of the system to see how this can be best delivered.”
Others, such as former Pensions Minister Steve Webb, have said the triple lock should remain in place until state pensions make up an adequate proportion of UK average wages. Some have warned that the state pension age may need to rise more rapidly to keep the cost of the policy down.
How do I claim my state pension?
The state pension is not paid automatically when you reach state pension age. Instead, you need to actively claim it. The DWP will contact you in the months leading up to you reaching state pension age to explain how you can do this.
If you’ve not received an invitation letter, but you’re within three months of reaching your state pension age, you can still make a claim, and the quickest way to do this is on the government website. To complete your claim, you’ll need the following details:
- the date of your most recent marriage, civil partnership or divorce
- the dates of any time spent living or working abroad
- your bank or building society details
If you don’t need the money immediately, then it may be worth deferring your state pension payments. Your state pension is increased by 1% for every nine weeks you defer. As a result, deferring your state pension by a year will mean the payments are boosted by around 5.8%.
When can I claim my state pension?
You can start to claim the state pension once you reach state pension age. This is currently set at 66 for both men and women. It is set to gradually rise to 67 between May 2026 and March 2028 and then to 68 between 2044 and 2046 - although there has been speculation that the latter rise could be brought forward.
When will the state pension be paid to me?
After you’ve made a claim for the state pension, you will get a letter about your payments, which will usually be paid every four weeks into an account of your choice. Note that you're paid in arrears. The payment day depends on your National Insurance number, although you might be paid earlier if your normal payment day falls on a bank holiday.
| Last 2 digits of your National Insurance number | Payment day of the week |
|---|---|
| 00 to 19 | Monday |
| 20 to 39 | Tuesday |
| 40 to 59 | Wednesday |
| 60 to 79 | Thursday |
| 80 to 99 | Friday |
Source: Standard Life
Who has been underpaid their state pension?
The DWP has been subject to severe criticism in recent years as a total of £571million is owed to pensioners dating as far back as 1985. The issues tend to centre on married women who were entitled to a state pension based on their husband’s National Insurance contribution record.
However, in many cases this increase did not take place, meaning that the women received a smaller state pension than they should have. More recently, divorced men and women have been urged to check their state pensions in case there have been errors calculating their payments.
You can check whether you may have been underpaid by using this tool on the LCP website, and make a claim directly to the DWP if you have been underpaid. While the DWP is attempting to correct these underpayments, there remain thousands of pensioners who have been underpaid, in some cases going back decades.
Can I still get the state pension if I retire abroad?
So long as you have built up a sufficient number of qualifying years of National Insurance contributions, then you can still receive the state pension even if you choose to retire abroad.
You will need to start claiming the pension within four months of hitting the state pension age, and you can do so by contacting the International Pension Centre. You can choose for the pension to be paid either every four weeks or every 13 weeks.
Your state pension will go up each year, so long as you retire in a country that is within the European Economic Area, Gibraltar, Switzerland - or to a country with a social security agreement with the UK. There are two exceptions to this latter group: Canada and New Zealand.
If you're wondering how the UK state pension compares to those in other countries, check out our guide to the countries with the most generous pensions.
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