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State Pension

The Basics

In a nutshell

  • The new State Pension is £185.15 a week (tax year 2022-2023) if you have worked for a full 35 years

  • Multiply the years you've worked (paid NI) by £4.70 for your approximate State Pension

  • The State Pension age rose to 66 in October 2020... and it's set to continue increasing - it will go up again to 67 between 2026 and 2028, and 68 between 2044 and 2046!

  • Unless some evil weirdo gets into power and breaks their promises. Surely not!!!!

What is a State Pension?

The State pays you an income after you have retired. It is not a fortune, but is intended to ensure we all have a basic amount of money to support us in our old age. Your entitlement is linked to your National Insurance Contributions and you will only receive it in full if you have paid these for a certain number of years. The State Pension age is slowly rising, so we’ll all be older when we get it. And not many of us will qualify for the full amount.

So-called 'Auto Enrolment' means the vast majority of employed people will now have a pension at work. It's a good idea as both you and your company pay in. It's a bit like getting a hidden pay rise which is being accumulated into a pension for you.

The Numbers

The full State Pension for the 2022-2023 tax year (beginning April 6th, 2022) is £185.15 or £9,627.80 a year. This was a very small increase from £179.60 a week, or £9,339.20 a year, for the 2021-2022 tax year. But here's the thing. You must have worked for at least 35 full years to get that. If you have worked for less than 10 years you will get nada. And the State Pension age is slowly creeping up.

[pause to feel old and knackered]

Pensions can be complicated things when you come to retire, but there is some help available. If you are coming up to retirement, the Government has funded a free advisory service called The Pensions Advisory Service which is staffed by smart cookies who know their stuff so give them a call.

The Benefits

  • Supplement your retirement savings with a private pension and you get free money from the Government

  • Basic rate taxpayers get a top-up of £20 for every £80 saved

  • Even better for higher rate taxpayers who get the £20 AND can claim a further £20 back on their tax return

The Detail


We think of your total income in retirement as three different ‘shots’ which get mixed together to make the total. This short Guide will help you to work out a rough estimate of how much you will be able to chuck into each glass – and how strong your cocktail will be. Hic

The First Shot: State Pensions

These 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. The new State Pension is currently £179.60 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.)

The Second Shot: Workplace Pensions

From this year you have to put in at least 5% of your salary (or ‘qualifying earnings’ which for the 2021/22 tax year is between £6,240 and £50,270 a year). The Government will bung in an extra 1% and your employer has to put in at least 3%. So that’s 8% which will be building up, month after month. The more you earn, the more you will save. You can refuse to take part (“opt out”), but it’s not a great idea because you’ll forfeit the 3% from your employer and 1% from the government.

The Third Shot: Private Pensions

These are pensions which you set up by yourself – a bit like you would an ISA, or buying insurance online yourself. You choose the pension and you choose how much you can afford to put away each month. If you’re about 40 and save £25 a month, you could save a stash of about £21,000 by your retirement age. Assuming you take no tax-free cash, this would give you a pension of about £24 a week. This might all sound horribly boring BUT, if you’re a basic rate tax payer, for every £80 you put in, the Government will top it up with another £20. That’s free money. Higher rate tax payers can claim back even more – another £20 come tax return time. Interested? See who we rate on our Compare pages.


Automatic Enrolment happened because the powers that be in Westminster saw that no-one was saving up for retirement. And gone are the days of comfy final salary schemes. And irritatingly enough, people are daring to live for longer.

So how on earth is everyone going to manage when they retire and there are no big handouts from the State OR from a company you worked at for about 100 years.

So enough of the carrot, here comes the stick. Every business has to provide a pension for its staff – whether it’s British Airways, the local chippie or even if you employ a nanny, cleaner or carer.


Spare us 97 seconds and we'll tell you in this short vid. Did you know that you get free money from the Government, to pat you on the head for saving up?


To receive the full £185.15 per week you need 35 qualifying years. If you have less than 35 years, your pension will be paid on a pro-rata basis calculated on your qualifying years. So, if you had 20 qualifying years, your pension would be 20 divided by 35, multiplied by £179.60 = £102.63 per week.

Brainfry? Don’t panic – if you are over 55 you can now go online to check your state 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. If you’re a few years’ shy of the total, it is possible to top up to make sure you receive the full amount.

If you can’t be bothered to do this today, as a rough guide work out how many years you have worked/paid National Insurance. And multiply this by £4.70 to get an estimate of what your weekly pension might be.


1. 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

2. 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 State Pension age has been rising for men and women until by October 2020 it will sit at 66... and it's set to continue increasing - it will go up again to 68 between 2044 and 2046! There are plans to increase this further to 70. 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 government site, which will also let you know your bus pass age! #smallpleasures

3. What if I haven’t 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” – sounds like knickers but it stands for National Insurance Contributions - 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

4. How much could I expect to have?

If you are 40 today, earning an average wage of £30,000, your workplace pensions savings could accumulate by about £2,400 a year. Add in investment growth and that could add up to a total sum of about £140,000 by the time you hit State Pension age. If you swap this in for a weekly figure, you’re looking at approximately £6,000 a year or £120 a week in your retirement*

5. How much do I need?

This is the big money question. Here’s another back of a fag packet... To get a rough feel for how much you might get every year from a chunk of pension cash, divide the chunk by 25. Got £140,000 saved up? You could get a pension firm to swap that for about £2,000 a year from retirement till you pop your clogs*. *This assumes you take out 25% of the £140,000 as tax-free income so you're trading in the remaining £105,000.

6. Can I opt out of auto-enrolment?

In short, yes. Is it a good idea to do so, probably not. Of course one impact is that your monthly take-home pay will fall slightly (all other things being equal) as you see some of your earnings being siphoned off into this pension. But the benefit is that you get an additional 3% from your employer this year – OK it’s disappearing into a pension and you won’t see any immediate benefits, but this is a bit like a pay rise which is being used to help save for your retirement. If you opt out, you won’t get this.

7. What if I am self employed?

If you are self-employed you fall through this net. You are really vulnerable when it comes to retirement savings. You need to take things into your own hands and set up a private pension. You could do this with a direct debit of £25 a month.
Or try allocating 5% of any paid invoice to a private pension when it hits your bank account? You will get tax relief and Government top-ups on this (without a paperwork drama). You can start with relatively small amounts and the hardest thing is getting started... Have a look at the private pensions Best Buys on our Compare pages to see which private pensions we like. Under 40? Read up on Lifetime ISAs.