News & insights

It’s common knowledge that the government provides people with a State Pension later in life but what might be less clear is what this actually means to you. Not everyone is entitled to the same amount, so read on to find out how much might you get, and when you can expect to receive it.

What is the State Pension?

The State Pension is a regular payment from the government that most people can claim later in life. It’s funded by National Insurance contributions, which are taken directly from people’s wages, meaning that people who are actively working and paying National Insurance are helping to provide for the older generation.

There have been different variations of the State Pension over the years, but the current format is called the New State Pension, and it was introduced in 2016.

How do I qualify?

Firstly, in order to receive a State Pension, you need to be of State Pension Age. This age is currently 66 years old for both men and women, but will increase to 67 from 6 May 2026, for those born on or after April 1960. The State Pension age is under review which means it may change again in the future – so if it’s a while until you reach retirement age it’s important to keep an eye on this.

To be able to claim the New State Pension, you also need to be born on or after 6 April 1951 if you are a man, or 6 April 1953 if you are a woman.

However simply turning 66 doesn’t guarantee you a State Pension. As mentioned earlier, the State Pension is funded by National Insurance contributions and so in order to receive a State Pension yourself, you need to meet certain requirements regarding the National Insurance contributions you have made during your working life.

You don’t need to have paid a specific amount of National Insurance in your working life to qualify for a New State Pension but you do need to have 10 ‘qualifying’ years on your record.

A ‘qualifying year’ is most commonly a year where you have been working and therefore making National Insurance contributions, though any years where you were receiving National Insurance credits, or paying voluntary National Insurance contributions, are also counted.

It’s also important to note that you won’t start receiving your State Pension automatically when you retire – you’ll have to apply for it.

How much will I get?

The full New State Pension is £221.20 a week, or about £11,500 a year. To get this full entitlement, you must have at least 35 qualifying years on your National Insurance record.

As mentioned earlier, you only need 10 qualifying years to start receiving a state pension, but the amount you will receive will be less, in proportion to how many qualifying years you have worked. Each qualifying year entitles you to 1/35^th of the full amount, so 10 years would get you £63.20 a week.

If you have gaps in your National Insurance record that mean you would not be entitled to the full New State Pension (i.e. due to time taken off work to look after children) you can either receive a reduced pension or make voluntary contributions to make up for these.

Where does my workplace pension fit in?

As you can see, the State Pension provides great support for people in their retirement but for a lot of people it simply won’t be enough to provide them with the retirement lifestyle they want.

The Retirement Living Standards developed by the Pensions and Lifetime Savings Association (PLSA) currently state that a retirement income of £14,000 per year for a single individual (or £22,400 for a couple) is required to achieve a minimum living standard in retirement, with further income leading to more comfortable living standards. This means that even the Full State Pension doesn’t quite meet the PLSA’s definition of a minimum retirement income.

This is why it’s important to make sure you are contributing into a workplace pension (or private pension). If you think of the State Pension as providing the bare minimum, the more you contribute to your workplace pension the more likely you will be to enjoy a more comfortable lifestyle in your retirement.

For more information on the State Pension, visit the government’s Money Helper website.