State pension explained How much state pension will I get?
The state pension is a valuable foundation on which to build your retirement income, together with any workplace or personal pension provision you have.
This guide explains how much state pension you'll get and outlines what is happening to the state pension in 2016.
Video guide: What's happening with the state pension in 2016
In this video, Which? Money editor Gareth Shaw explains the key changes in 2016.
How much state pension will I get?
There are two parts to the state pension – the basic state pension, which almost everyone gets, and the additional state pension, which is only for employees. You qualify for the basic state pension by reaching state pension age and making 30 years' worth of National Insurance contributions.
Basic state pension
The basic state pension is worth £115.95 a week for a single person in 2015/16 (or £6,029 a year).
If you’re married, and both you and your partner have built up state pension, you’ll get double this amount – so £231.90 a week. But if your partner has not built up their own state pension, they'll still be able to claim a state pension based on your record.
If your income is below a certain level, you can boost it by claiming pension credit. This will take your income up to £151.20 a week for a single person and £230.85 a week for a couple (in 2015/16).
Go further: Income options for your pension under the 2015 rules - how the new pension freedoms could boost your funds
Topping up the state pension
Those retiring before the flat-rate state pension starts in April 2016 are able to gain additional state pension by paying so-called Class 3A voluntary National Insurance contributions between October 2015 and April 2017.
You'll basically be swapping a cash lump sum for a boost to your weekly state pension. The government is offering any men born before 6 April 1951 and women born before 6 April 1953 a time-limited opportunity to buy more state pension.
To increase your state pension by £1 per week will cost £890 if you are 65 years old. The maximum you can top up your pension by is £25 per week, which would cost £22,250 at age 65. The cost of topping up falls as your age increases, so for a 70 year old an extra £1 per week costs £779, for a 75 year old it’s £674 and for someone aged 80 it costs £544. Find out more via Gov.uk topping up your state pension.
State pension statement
You can currently get a state pension statement from the Department for Work and Pensions (DWP) to find out how much state pension you may get and the number of qualifying years on your National Insurance record.
The forecast gives you an estimate of what you can expect in terms of your state pension based on your National Insurance contributions.
To get a statement, call 0345 3000 168, go to gov.uk/state-pension-statement, or write to The Pension Service 9, Mail Handling Site A, Wolverhampton, WV98 1LU.
How much additional state pension will I get?
You may also qualify for the additional state pension, also known as State Earnings Related Pension Scheme (Serps) or state second pension (S2P).
The additional pension is based on your earnings. The maximum you could claim in 2014/15 was £163 a week on top of your basic state pension - taking your total to £276.10 a week.
Most people opted, or 'contracted', out of the additional state pension at some point in their working lives. This second part of the state pension disappears in April 2016.
Go further: State second pension and Serps - find out how much more you could get on your state pension
State pension reforms
The amount of state pension you get will change in April 2016. The basic and additional state pensions are going to be replaced by a flat-rate, single-tier state pension, with a 'starting amount' of £155.65 in April 2016.
People might get more or less than the indicated full new state pension (starting amount). Those that have built up a certain amount of additional state pension will get a higher amount, while those that were contracted out before 6 April 2016 for a significant time will probably get less.
This figure will be whatever is higher – either the amount you would get under the old system or the amount you would get had the new system been in place over the whole of your working life.
The additional pension and 'contracting out' will be abolished, and so will part of pension credit. Qualifying National Insurance years will also increase from 30 to 35 years.
This will be good news for the self-employed, who don’t currently qualify for second state pension, and for women, who may have gaps in their National Insurance records from caring for children – they will receive more state pension.
But some people, like public sector workers in contracted out defined benefit, or final salary schemes, will see their National Insurance contributions rise - effectively meaning a pay cut for them.
Go further: What am I entitled to now I'm retired? - find out about all the benefits you're eligible for
When can I claim state pension?
You can claim state pension when you reach state pension age. For men this is currently 65. For women, state pension age has started to rise, from 60 in 2010 to 65 in November 2018. Use our state pension age calculator to find out when you'll receive it.
From December 2018 state pension age will rise for both men and women, until it reaches 66 in April 2020 and 67 between 2026 and 2028. After this, the state pension age will be linked to longevity, and will be reviewed every five years.
If you live in the UK, you won’t receive your state pension automatically when you reach state pension age. You’ll get a letter four months before you retire, which will detail how you can claim.
There are three ways you can claim your state pension:
- Over the phone, by calling the State Pension claim line (0800 731 7898).
- Online, by registering with Government Gateway via the Department for Work and Pensions website (it takes about seven days for your Government Gateway user ID and activation code to arrive in the post).
- By downloading the State Pension claim form and sending it to your local pension centre. You can find this form on the Government’s website.
Go further: How do I qualify for the state pension? - read our handy guide to see if you're eligible
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