The State Pension

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"Most people can survive on the State Pension."

"Most people can survive on the State Pension."

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The State Pension has improved in recent years and some people do survive on it, but it’s not easy. It’s been estimated that, as a minimum, a single person would need £14,400 each year to live in retirement (£22,400 for a couple) and more than this in London. The maximum payable under the new State Pension scheme is £11,502, nearly £3000 less than the minimum. And not everyone will qualify for the full amount.

Source: Retirement Living Standards, Pension and Lifetime Savings Association

The State Pension is payable from age 66. This will rise to age 67 by 2028. The increase from 66 to 67 will take place gradually between 2026 and 2028. If you’re affected by this, the government’s State Pension Age calculator will tell you when you’ll receive your State Pension.

The State Pension pays up to £221.20 a week (2024-25):

  • To qualify for the full amount, you must have paid National Insurance (NI) contributions, or received National Insurance credits, for 35 years (NI credits are explained below).
  • You need to have paid National Insurance contributions (or received credits) for 10 years before you qualify for any State Pension.
  • The current State Pension scheme started in April 2016. You might have qualified for more than £221.20 under the previous State schemes. If so, you’ll still receive the higher amount.

If you’re over 55, the government’s State Pension Forecast will tell you how much your State Pension could be worth based on your National Insurance record to date.

"National Insurance credits": You can qualify for National Insurance credits if you are not making National Insurance contributions. Typically, this will arise when you’re not in paid employment.

National Insurance credits can boost your National Insurance record, which means you should receive a higher State Pension. You should be eligible for National Insurance credits if you fall into any of the categories below:

• Receiving Child Benefit for children under 12

• An approved foster carer

• Caring for at least 20 hours a week for people receiving Attendance Allowance, the middle or highest rate care component of Disability Living Allowance, or Constant Attendance Allowance or Personal Independence Payment (or if you’re caring for 20 hours each week for other disabled people who need help).

• Receiving certain benefits such as Jobseeker’s Allowance or Incapacity Benefit.

• Registered as unemployed and looking for work

• Provided evidence of being unfit for work

• Receiving Universal Credit or Working Tax credit

How can I boost my State Pension?

If you don’t qualify for the full amount, you can usually increase it.

You can make voluntary National Insurance contributions to cover any of the last 6 years. You may be able to pay for gaps over 6 years ago depending on your age. There are special arrangements if you reached State Pension age on or after 6 April 2016. You have until 5 April 2025 to pay voluntary contributions to make up gaps between April 2006 and April 2017. Boosting your State Pension this way can be a good idea. You can learn more here.

What happens if I delay taking my State Pension?

If you don’t take it when you reach State Pension Age, it does increase.

If you reach State Pension age on or after 6 April 2016, and you decide to delay taking your State Pension, it will increase by 1% for every 9 weeks you delay. That’s equal to an increase of just under 5.8% for every full year you delay.

Does the State Pension increase each year?

The State Pension increases each year by the higher of: 

  • The average increase in earnings between May and July.
  • The rate of rising prices (measured by September's Consumer Price Index).
  • 2.5%

This is called the ‘triple lock’. The rise April 2024, was in line with the rise in earnings.

Can I still receive my State Pension if I retire abroad?

State Pensions can be paid anywhere in the world, but whether you’ll receive annual increases depends on where you choose to retire. You can find a list of the countries where annual increases are payable here.

Applying for your State Pension

Your State Pension isn’t paid automatically, you must apply for it.

You should get a letter no later than 2 months before you reach State Pension age. This will explain what to do. If you don’t receive the letter, you can still apply for your State Pension online.

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