The State Pension - how does it work?

The State Pension - how does it work?

When can you get a State Pension?

Previously, women reached the SPA at 60 and men at 65. Now, by 2018,  both can qualify for the SPA at 65. (If you are a woman born between April 1950 and 6 December 1953, it’s best to use the government’s SPA calculator, to see when you can claim). From 2020 the SPA will rise to 66; it will go to 67 from 2026, and there are more rises in the pipeline.

How much State Pension will you get?

At the moment our State Pension is adjusted, every April, to make sure it keeps going up against the cost of living. It’s taxable, and how much you’ll get depends how many National Insurance (NI) contributions you made and when you’re due to start claiming.

  • If you’re due to claim before April 2017, then you need 30 years of contributions for a full State Pension (working, being credited while caring for a family, or paying voluntarily to make up on missed years). You may also get the second state pension or a state earnings related pension, depending on your NI contributions and if you ‘contracted out’ (paid your NI contributions into a private pension scheme instead).
  • If you’re due to claim after 2017 then you’ll get a single State Pension payment – a flat rate of £144 – but you’ll need 35 years of NI contributions to get the full amount.

Do you have to claim the State Pension?

No. It’s not widely known, but you can defer – put off – claiming your State Pension. As a result, the amount you’ll receive increases by 1% for every 9 weeks you don’t claim. That works out at 5.8% per year. So if you’re a man born on or after 6 April 1951, or a a woman born on or after 6 April 1953, then you’ll get the full State Pension of £148.40 per week – annually, that works out at £7,716.80 a year. But if you defer for a year, you’ll get an extra £446 (just under 5.8% of £7,716.80) – which is well worth thinking about.


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