What is a State Pension?
In short, a state pension is a regular payment from the Government, usually weekly, once you reach state pension age and is based on your national insurance contributions through your adult life.
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For some people, state pension would be the only income at retirement and for others, it would be an addition to the workplace pension or private pension. You must understand your entitlement and the income from pensions meets your needs in retirement.
In short, a state pension is a regular payment from the Government, usually weekly, once you reach state pension age and is based on your national insurance contributions through your adult life.
Your entitlement to State pension can vary depending on your circumstances, based on your date of birth and gender, and whether you have a personal or workplace pension. You can check your state pension age here.
To get basic state pension you must have credited with national insurance contributions. The basic state pension currently stands at £134.25 per week.
This amount increases every year by whichever is the highest of the following, also known as the “triple lock.”
You will need 35 qualifying years to get the full new State Pension. You will get a proportion of the new State Pension if you have between 10 and 35 qualifying years.
A ‘qualifying year‘ is a tax year (April to April) during which you have paid, have been treated as having paid, or have been credited with enough National Insurance Contributions (NICs) to make that year qualify towards a Basic State Pension.
When you reach state pension age, you have to claim it… it does not come automatically to you.
One of the things you can do is defer or delay claiming your state pension. What this does is that it not only allows you to claim your state pension when you are ready but could also increase the payments you get when you decide to claim it. The downside of this, however, is that you could be taxed on the extra money you receive from the deferment.
2. 2016 is an important year for State Pensions…This is where it gets a little confusing, but we’ll try and simplify it.
| State Pension age before 6 April 2016 | State Pension age after 6 April 2016 |
| Basic State Pension – £134.25 per week 2020/21 | Basic State Pension – £175.20 per week 20/21 |
| Deferred State pension – £148.21 per week 2020/21 | Deferred State Pension – £185.36 per week 2020/21 |
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Important Information
The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested.
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