Trusted Information Creator Factsheet The State Pension This factsheet explains what the State Pension is, who is able to get it and how much you can expect to get. It covers the new State Pension, for people who reached State Pension age on or after 6 April 2016. And the basic State Pension, for people who reached State Pension age before 6 April 2016. Call free on 0800 319 6789 Visit www.independentage.org Last reviewed: April 2021 Next review date: September 2021 About Independent Age Whatever happens as we get older, we all want to remain independent and live life on our own terms. That’s why, as well as offering regular friendly contact and a strong campaigning voice, Independent Age can provide you and your family with clear, free and impartial advice on the issues that matter: care and support, money and benefits, health and mobility. A charity founded over 150 years ago, we’re independent so you can be. If you’re in Wales, contact Age Cymru (0800 022 3444, ageuk.org.uk/cymru) for information and advice. In Scotland, contact Age Scotland (0800 12 44 222, ageuk.org.uk/scotland). In Northern Ireland, contact Age NI (0808 808 7575, ageuk.org.uk/northern-ireland). In this factsheet, you’ll find reference to our other free publications. You can order them by calling 0800 319 6789 or by visiting www.independentage.org/publications The State Pension – April 2021 2 Contents 1. What is the State Pension? 4 2. New State Pension 6 3. Basic State Pension 12 4. Get a State Pension statement 18 5. Your National Insurance record 19 6. Claiming on a partner’s National Insurance record 22 7. How to claim your State Pension 25 8. The State Pension if you move abroad 27 9. Pension Credit 28 10. Useful contacts 31 The State Pension – April 2021 3 1. What is the State Pension? The State Pension is a regular payment made by the government to people who've reached State Pension age. How much you get depends on your National Insurance contributions but most people will get at least some State Pension. Many people will have workplace pensions or personal pensions as well, but the State Pension is a valuable foundation for your retirement income. Make sure you claim it – you usually won’t get it automatically. Which State Pension you'll claim Changes to the State Pension were introduced on 6 April 2016, so there are now two different systems in place. Which one you claim under depends on when you reach your State Pension age. This table can help you work out which system you qualify for. Date of birth Your pension system Women – before 6 April 1953 Basic State Pension – read Men – before 6 April 1951 chapter 3 Women – on or after 6 April 1953 New State Pension – read Men – on or after 6 April 1951 chapter 2 Even if you decide to delay your State Pension claim, you’ll still get it under the system you qualify for when you do start claiming it (see chapter 7). Checking your State Pension age You can only receive the State Pension when you reach State Pension age. This is now the same for all genders and will reach 67 by April 2028. More increases are planned for people born after 6 April 1970. The State Pension – April 2021 4 To check your State Pension age, visit gov.uk/state-pension-age or call the Future Pension Centre on 0800 731 0175. Early retirement and your State Pension If you retire before your State Pension age, you’ll still have to wait until you reach State Pension age to receive your State Pension, but you can make the claim four months in advance. Q: Can I get my State Pension if I’m still working? A: You don’t have to stop working when you reach State Pension age – you can keep on working and still receive your State Pension. You stop paying National Insurance contributions once you reach State Pension age. Pensions are taxable, so if your annual income is higher than the personal allowance (£12,570 in the 2021/22 tax year), you’ll pay income tax on your State Pension. The State Pension is paid without tax deducted and any tax due is collected from your other sources of income. The State Pension – April 2021 5 2. New State Pension This section is for people who reached State Pension age on or after 6 April 2016. If you reached State Pension age before this date, please go to chapter 3. What is the new State Pension? The new system is designed to be simpler. It replaces basic and Additional pensions with one new pension system. Additional State Pension has been ended. So anyone with at least 35 years of National Insurance (NI) contributions now gets the same rate, unless they were ever contracted out of the Additional State Pension (see page 10). The full rate for 2021/22 is £179.60 a week. But the amount you get could be less or more, depending on your situation. For example, if you’d already build up some State Pension under the old system, you may get more during the transition from the old to new system. Eventually, it won’t be possible to get more than the full rate. Who can get it You’ll claim under the new system if you reached State Pension age on or after 6 April 2016. This means you’ll get the new State Pension if you’re a: • woman born on or after 6 April 1953 • man born on or after 6 April 1951. If you reached State Pension age before 6 April 2016, even if you haven’t yet claimed your pension, you’ll be claiming under the old system – see chapter 3. The Isle of Man uses a different system. For more information, visit gov.im/categories/benefits-and-financial-support/pensions. The State Pension – April 2021 6 How much you can get The exact amount you’ll get depends on how many qualifying years you have in your NI record. The qualifying years don’t have to be consecutive. See page 8 to find out what counts as a qualifying year. How many What you’ll get qualifying years 35 years or more You’ll get the full rate of new State Pension. For 2021/22, this is £179.60. If you were contracted out of the Additional State Pension during your working life, you may get a different amount – see page 10. 10 – 35 years You’ll get some new State Pension, depending how many years you have. For example, if you have 20 qualifying years, you’ll get 20/35ths of the full rate (unless you were contracted out at some point). So £179.60 divided by 35 x 20 = £102.63 a week. Most people will need at least 10 years to get any new State Pension. There may be some exceptions, for example, if you’re a woman who paid reduced-rate NI contributions (known as the Married Woman’s Stamp) – see chapter 6. You generally won’t be able to claim on your spouse or civil partner’s NI contributions. Your State Pension rate is usually based on your own NI record. There are some exceptions to this – see chapter 6. Good to know If you qualify for less than the basic State Pension you may be able to increase it by paying voluntary NI contributions – see chapter 5 for more information. The State Pension – April 2021 7 How you build up your NI record You usually build up your NI contributions by: • paying NI while employed and earning at least £184 a week (2021/22 rate) from one employer. If your earnings are between £120 and £184 a week from one employer, you won’t actually pay any NI contributions but you’ll be automatically credited with them • paying NI while self-employed • making voluntary NI contributions • receiving NI credits, for example, while unemployed or caring for someone. If you’re a grandparent caring for a child under 12, you may be able to receive NI credits. If you’re still working, you’ll have to pay NI contributions until you reach State Pension age, even if your NI record shows more than 35 qualifying years. If you’d like more information, call the National Insurance enquiry line on 0300 200 3500. You can also check your NI record online at gov.uk/check-national-insurance-record. What counts as a qualifying year? • If you’re employed, this is a tax year where you earned at least the lower earnings limit from one job (£6,240 in 2021/22). • If you’re self-employed, this is a tax year where you paid NI contributions if you earned at least £6,515 (2021/22 rate). You might have paid them voluntarily if you earned less than that. • If you’ve paid enough voluntary NI contributions or been awarded enough NI credits in a tax year, that is a qualifying year. The tax year that you turn your State Pension age won’t count as a qualifying year, even if you work or contribute towards your NI record during that year. The State Pension – April 2021 8 The starting amount for the new State Pension If you’re approaching retirement, you’ll probably already have made some NI contributions before the new system was introduced. Any NI contributions you made or were credited with up to 5 April 2016 will be turned into a ‘starting amount’.