State pension: 5 facts you need to knowAlmost 13 million are claiming state pension

13 November 2015

The flat-rate state pension will be introduced in April 2016

One in five people are now claiming the state pension, according to new government figures. 

Data released by the Department of Work and Pensions reveal that almost 13 million people receive the benefit, up from 11.6 million a decade ago.

The state pension is set for a series of major changes in April 2016. 

Here, we run through the key facts you need to know ahead of this revamp. 

Find out more: What's happening with the state pension in 2016? - our comprehensive guide

1. The average weekly state pension payment is £130.30

State pension recipients currently receive £130.30 a week on average. 

The exact amount you'll receive, or whether you're eligible for payments at all, is largely dependent on your National Insurance contributions.

The basic state pension is currently worth £115.95 a week, but some people get additional state payments on top of this. 

The system is being transformed in April 2016, but if you reach state retirement age before April 6, 2016 these changes won't affect you. 

2. The rates for the new state pension are yet to be confirmed

Rates for the new single-tier state pension are yet to be finalised, but it's expected that the new 'flat rate' will be around £155 when it starts in April 2016. 

These rates are due to be announced in Autumn 2015, and it has been widely anticipated they'll be confirmed in the Autumn Statement on November 25, 2015. 

People might get more or less than the indicated full new state pension - if they've built up additional state pension, they might get more. If they were contracted out for a significant time, they will probably get less.

Find out more: How much state pension will I get? - see a detailed explanation of what you'll receive. 

3. Pension credit 

One in seven state pension claimants also receive pension credit.

This is a 'means-tested' benefit based on your earnings and tops-up your basic state pension to a minimum weekly income of £151.20.

It's made up of two parts called 'Guarantee Credit' and 'Savings Credit'. Of the 2.1 million pension credit recipients (2.51 million including partners), 44% receive Guarantee Credit only, 20% receive Savings Credit only, while 35% receive both. 

The Savings Credit element of pension credit will disappear in April 2016. 

Just over half of pension credit recipients are also claiming Attendance Allowance and Disability Living Allowance. 

Find out more: Pension credit  - find out if you're eligible for this benefit.

4. You can top up your state pension

Since October 2015, those who reach state retirement age by April 6 2016 have been able to top up their state pension by making a one-off lump-sum payment to the government. 

These payments, called Class 3A National Insurance contributions, allow you to boost your state pension by up to £25 a week. 

The cost of Class 3A NICs falls with age. 

  • For those aged 65, an extra £1 per week of state pension income will cost £890, while an extra £25 a week will cost £22,250 
  • For those aged 80, it would cost £544 for an extra £1 a week, or £13,600 for £25 per week 

Find out more: Can I top up my state pension? - all the details you need

5. More than a million people are working beyond state retirement age

Government statistics suggest more than a million people are working beyond state retirement age. 

Some keep working because they need the money, while others do so because they enjoy their role. 

You can still receive your state pension if you choose to carry on working, but you may choose to defer your state pension and boost your weekly payments when you eventually claim.   

Currently, you'll get the equivalent of 10.4% extra for each year you defer, although this falls to 5.8% for those that reach state retirement age after April 2016.

Find out more: I want to carry on working in retirement - everything you need to consider

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