Share State Pension

The Basics

State Pensions are funded from National Insurance (NI) contributions and are intended to ensure we all have a basic amount of money to support us in our old age. WARNING – it’s not loads, you might not get the full amount and you might need to be older than you think….That’s cheerful!

The new State Pension is currently £155.65 a week BUT you’ll get nada if you haven’t got at least 10 years of NI contributions under your belt from working (or the relevant ‘credits’ from periods of illness of unemployment.)

To receive the full £155.65 per week you need 35 qualifying years. And don’t believe the headlines – not many of us will get that. If you have less than 35 years, your pension will be pro-rated on your qualifying years. So, if you had 20 qualifying years, your pension would be 20/35 * £155.65 = £88.94 per week.

Brainfry? Don’t panic – if you are over 55 you can now go to this site to request a pension statement. The pension statement will give you an estimate of how much you may receive under the new State Pension based on your current National Insurance record.

When can I retire?

The State Pension age is the earliest age you can claim your State Pension – warning – it’s been all change since 2010!

The changes will see the State pension age rise to 65 for women between 2010 and 2018, and then to 66, 67 and 68 for both men and women. There are plans to change State Pension ages further so do keep an eye on this. This is because we’re all selfishly deciding to live longer and so the Government is struggling to keep up.

The easiest way to find your state pension age is to enter your birth date into the following government site, which will also let you know your bus pass age! #smallpleasures

 

I've not got enough years under my belt!

You may find that due to career breaks (particularly if you have raised children) you do not have sufficient qualifying years to achieve full State Pension and you may be able to make voluntary contributions to increase your entitlement. In other words, you pay the Government a bit more – and you get a higher State Pension in return.

Before deciding whether to pay voluntary NICs, you should make sure that:

  • There are gaps in your NI record for which payment can be made
  • You know how much you need to pay
  • You understand the benefits of paying

As an example, the cost to buy an extra £1 per week in a state pension for the rest of your life for a 68 year old is circa £827, according to the Government website. So if you wanted to top things up by £5 a week you multiply £827 by 5 and make a lump sum one-off payment of £4,135. This Government site will give you your number.

Can I defer my state pension?

You don’t have to take your State Pension at your State Pension Age. You can put off taking it and this can increase the amount you will get when you do claim it. Under the new system your pension is currently increased by 1% for every 9 weeks that you put off claiming it.

3 Min Reads

View all
cover_retirement-01-e1469097123681

Our retirement income guide

Pensions Explained
This no-nonsense guide will help you work out what your granny salary could be.
which-logo

Which guide to State Pensions

Pensions Explained
This Which guide has some useful facts and figures when sorting out your state pension
how-can-i-find-out-how-much-my-state-pension-is-likely-to-be-01-e1469097917230

How can I find out how much my State Pension I’ll get?

Pensions Explained
From the start of this tax year, the state pension has been a – relatively generous - £155.65 per week, but it comes with a few caveats.

Sign up to our e-newsletter

Holly's blog offers helpful tips, thoughtful ideas and her latest news and events.

Important stuff!

Holly and the team have worked in the finance industry for many years but we are not regulated to give you personal financial advice, nor are we regulated by the industry watchdog (although we do talk to them a lot). For every story on this site about a good investment, or something which went up by 10% or made someone £200, we could share a story about a bad investment, something which fell by 10% or lost someone £200. Nothing’s certain when investing so if you’re really unsure, or dealing with complicated stuff like working out what to do with a pension when you retire, we’d really suggest you get some financial advice. Here are some tips on  how to pick a good financial adviser. Or check out Unbiased or VouchedFor. Just remember, commission has been banned now so advisers need to be very clear with you about what you are paying them and when.