Planning your retirement State pension

National Insurance contributions build up your entitlement to a state pension

You don't have to save the whole amount you'll need for retirement yourself. But equally, a state pension isn't going to keep you in the lap of luxury.

Getting the most from a state pension

The state pension is made up of two parts – the basic state pension (currently £102.15 a week, or £163.35 for a married couple) and, if you are an employee, the state second pension (S2P).

How much you get from S2P (and its predecessor, the state earnings related pension scheme, known as Serps) depends on your salary, how many years you've been paying National Insurance and whether or not you ever opted out of this part of the state pension. Self-employed people are not eligible for this second state pension.

Qualifying for a state pension

Eligibility for the full basic state pension depends on the number of ‘qualifying’ years you've earned over your working life. Qualifying years are based on the National Insurance contributions you've paid, or been credited with, during your working life.

If you reached state pension age before 6 April 2010, men needed 44 years of contributions and women 39 years to get a full state pension. But this changed for people reaching state pension age on or after that date.

If you reached state pension age after 6 April 2010

In 2010, the government reduced the number of years needed to qualify for a full basic state pension to 30, for both men and women. This means that more women should get the full basic pension.

Pension credit

Pension credit works alongside state pensions and is the government’s means-tested benefit system for older people. It promises a weekly income of at least £137.35 to single people aged 60 or over, and £209.70 for couples if you have no other pension or savings. 

For more advice on pensions, see our book Pensions Explained, which covers state, personal and company pension funds.