The state pension is a qualifying benefit provided by the UK government.
You need to build up a certain number of National Insurance credits to be able to claim it - you can do this by working and paying tax, looking after children, receiving certain benefits, or while on jury service or maternity/paternity leave.
Once you have built up enough National Insurance credits, you'll be entitled to receive the state pension as soon as you reach the Government’s official age (which is currently 66).
The state pension age for men and women is currently 66, although this is set to rise to 68 over the next few years.
The amount you get depends on how long you have been paying National Insurance (NI).
To get the full new state pension of £179.60 a week, you must have paid National Insurance for 35 years.
You’ll need a minimum of 10 qualifying years to get any state pension, which would give you around £51 per week.
You get about £5 a week* for every year you have paid National Insurance.
If you want to know exactly how much state pension you could get, contact the Department for Works and Pensions on 0345 300 0168 or visit the GOV.UK website.
* Calculated using maximum payout of £179.60 divided by 35 (years) = £5.13
Basic state pension is also based on how long you have paid National Insurance, but you may have the option to top up your contributions to qualify for the maximum amount.
To get the full basic state pension of £137.60 a week, you need to have paid National Insurance for 30 years.
You may also qualify for the Additional state pension on top of your basic state pension. Find out more on the GOV.UK website.
Since 2010, UK governments have promised to increase state pension payouts by at least 2.5% a year. What’s more, if average prices or earnings increase by more than that rate, pensions will go up to match whichever measure rises the most.
This so-called "triple lock" was designed to ensure pensioners do not become poorer relative to working people or due to rising prices on things like food and fuel.
However, the triple lock’s earnings element has been suspended for 2022. This is because wages have risen by 8.3% in 2021.
The government decided to suspend the triple lock to stop pensioners "unfairly benefiting from a statistical anomaly" and said the earning element would return the following year.
The secretary of state for Works and Pensions announced on 25 November 2021 that in 2022/23, the basic state pension will increase to £141.85 per week, and the full new state pension will increase to £185.15, in line with the consumer price index (CPI), which stands at 3.1%.
If you work for someone as an employee, you may need to pay class 1 National Insurance (NICs) depending on how much you earn, for example:
|Weekly pay||NI rate|
|£184 to £967||12%|
A plan to add an extra 1.25 percentage points to National Insurance to help pay for social care has been announced. The extra tax is not set to be applied until April 2022.
You will pay either class 2 or class 4 contributions through your self-assessment form at the end of the tax year.
The amount you contribute depends on your profits for the year:
Class 2: These are paid if your profits are over £6,515 a year and cost £3.05 a week.
Class 4: These amount to 9% of any profits between £9,569 and £50,270; and 2% on any profits over that amount.
This depends on your type of employment:
If you are employed, your employer is responsible for paying National Insurance to HMRC on your behalf.
If you are self-employed, you are responsible for declaring your income and paying National Insurance.
Your National insurance is paid to HMRC and gives you a state pension when you reach your pension age.
If you haven’t paid enough National Insurance over the past six years, you can usually pay a lump sum voluntary contribution to make up for the missing years.
Find out more on topping up your National Insurance contributions on the gov.uk website.
As well as paying for your state pension, it also goes towards other benefits such as:
For more information on National Insurance visit the gov.uk website.
You can start claiming after you reach the state pension age - currently 66.
You do need to claim once you reach pensionable age, however. If you don't, your pension will automatically be deferred.
If you defer your state pension, you could get larger payments when you do start claiming.
However, you will need to live long enough for the extra payments to make up for the ones you deferred, and the increased payments could be subject to tax.