Understanding The State Pension

The basic State Pension is a government-administered pension. It is based on the number of qualifying years gained through National Insurance contributions (NICs) you've paid, are treated as having paid or have been credited with throughout your working life. The State Pension is made up of two parts, the Basic State Pension and Additional State Pension.

How much is the basic State Pension?

In 2010-2011, the full basic State Pension is £97.65 a week. The full basic State Pension for a married woman using her husband’s National Insurance record is £58.50 a week.   

This means that a married couple could get separate basic State Pension payments totaling £156.15 a week. If they both qualify for a full basic State Pension this could be £195.30 a week.

A State Pension forecast will tell you the current value of your State Pension and the amount you may get at State Pension age. Click here for a link to obtain a State Pension forecast.

Do you qualify for the basic State Pension?

If entitled, you can get the basic State Pension when you reach State Pension age. This is 65 for men born on or before 5 April 1959 and 60 for women born on or before 5 April 1950. The State Pension age for women born on or after 6 April 1950 but before 6 April 1955 is rising from 60 to 65 between 2010 and 2020. The State Pension age for women born on or after 6 April 1955 but before 6 April 1959 is 65. State Pension age will increase for both men and women from age 65 to 68 between 2024 and 2046.

You qualify by building up enough 'qualifying years' before State Pension age.

What are qualifying years?

A qualifying year is a tax year where you have sufficient income to pay National Insurance Contributions (NICs), or are treated as having paid or being credited with NICs.

In 2010-11, you need to have £5,044 or more of such earnings if you are an employee or £5,075 or more if you are self-employed.

How many qualifying years do you need?

Currently men normally need 44, and women normally need 39 qualifying years to get the full basic State Pension.

However, if you reach State Pension age on or after 6 April 2010, you will need 30 qualifying years for a full basic State Pension.

To find out more about the State Pension, you can download the leaflet 'State pensions – your guide' from The Pension Service website by clicking here

If you've been a parent or carer

If you haven't paid enough NICs because you've been looking after children or caring for someone long-term, you may be eligible for Home Responsibilities Protection. If you reach State Pension age before 6 April 2010, Home Responsibilities Protection can reduce the number of qualifying years you need to qualify for the basic State Pension.

If you reach State Pension age on or after 6 April 2010, Home Responsibilities Protection is being replaced with National Insurance credits. Years of Home Responsibilities Protection built up before 6 April 2010 will count as qualifying years of National Insurance credits.

If you've been claiming benefit

If you've been receiving certain benefits, such as Carer's Allowance, Jobseeker's Allowance, Incapacity Benefit or Employment and Support Allowance – ‘contribution’ based (if you have paid enough National Insurance contributions), you'll have automatically received National Insurance credits for the weeks when you've been claiming.

To find out more, contact the NICs Office Here

If you don't qualify for the full basic State Pension

If you don't qualify for the full basic State Pension, but have 25 per cent or more of the qualifying years, you'll get a weekly basic State Pension between the minimum (£24.41 in 2008-09) and the maximum (£97.65 in 2010-11).

If you have fewer than 25 per cent of the qualifying years, you're not normally entitled to receive any basic State Pension. However, you can get a 'non-contributory' or 'Over 80 Pension' if you're aged 80 or more and meet the residency conditions. This is £58.50 a week for 2010-11.

If you reach State Pension age on or after 6 April 2010

If you don’t qualify for the full basic State Pension, but have some qualifying years, you will get one thirtieth of the full amount for each qualifying year.

You can get more information from your local pension centre. Click Here.

Pension Credit

If you're aged 60 or over and living in Great Britain, Pension Credit could top up your weekly income to a guaranteed minimum of:

·         £132.60 if you're single

·         £202.40 if you're a couple

From 2010, the age from which you can get Pension Credit will gradually increase.

Claiming your State Pension

The Pension Service should automatically send you a claim form four months before you reach State Pension age.

If you haven't received this form three months before your birthday, you can:

·         download the claim form from The Pension Service website, print it out, then complete and send it to your local pension centre

·         if you have speech or hearing difficulties, a textphone service is available on 0845 60 60 285 or type talk on 18001 0845 60 60 265

·         for Welsh speaking customers living in Wales the phone number is 0845 60 60 275 (8.00 am to 8.00 pm, Monday to Friday) and the textphone number is 0845 60 60 295 or type talk on 18001 0845 60 60 275

How the State Pension is paid

Your State Pension is paid directly into your bank, building society, Post Office  or National Savings account that accepts Direct Debit payment.

If you’re registered blind or need someone else who cares for you to collect your money you can be sent a cheque to cash at the Post Office.

Putting off claiming your State Pension until later

You don't have to claim your State Pension as soon as you reach State Pension age. If you wish, you can put off claiming it and get a higher weekly amount or the option of a one-off taxable lump sum payment instead.