How much new state pension will I get in 2018/19?
The state pension rules changed radically on 6 April 2016, for men born on or after 6 April 1951 and women born on or after 6 April 1953.
There is a 'single tier' pension payment for people in this age group with a 'full level'.
In 2018/19, the full level of the new state pension is £164.35 a week (£8,546.20 a year), up from £159.55 a week (£8,297 a year) in 2017/18.
You may get more or less than this. We've explained why in more detail below
And you only qualify for a full state pension once you have 35 years' worth of National Insurance contributions. Previously it was 30 years' worth.
To get any state pension at all, you need 10 years of National Insurance contributions.
How much basic state pension will I get in 2018/19?
If you reached state pension age before 6 April 2016, the changes don’t affect you.
In this case, the basic state pension rises to £125.95 a week (£6,549.40 a year) in 2018/19, up from £122.30 a week (£6,360 a year) in 2017/18.
If you’re married, and both you and your partner have built up state pension, you’ll get double this amount – so £251.90 a week.
But if your partner hasn’t built up their own state pension, they'll still be able to claim a state pension based on your record.
You may also have built up some additional state pension, previously known as the State Earnings Related Pension Scheme (Serps) or state second pension (S2P).
If you did so, you’ll get more than £125.95 a week. The maximum you can is £172.28, in addition to the basic state pension.
How much state pension will I get if I qualified on or after 6 April 2016?
If you reach state pension age on or after 6 April 2016, the starting point for calculating what you get is the ‘full level’ of the new state pension of £164.35.
But the name is confusing, because you may get more or less than this.
- If you have made full National Insurance (NI) payments, building up additional state pension, you’re likely to get more.
- If you ‘contracted out’ and paid reduced NI contributions for several years, you’re likely to get less.
You’ll get whichever is higher - the amount you would have got on the last day of the old system, or the amount you would get had the new system been in place over the whole of your working life.
Government estimates show that only around half of those retiring over the next year will qualify for the full state pension. Our short video explains how this works.
What was ‘contracting out’?
To cut the bill for the state pension, the government previously allowed pension savers to 'contract out' of being part of the second state pension scheme.
You paid less National Insurance (NI) and didn't get the additional state pension, and the money you saved in NI was put into your workplace or private pension.
What if I’ve been contracted out?
If you were contracted out, you've been making NI contributions at a reduced rate (in a final salary scheme), or receiving a rebate into your pension (in a ‘defined contribution’ scheme, where you build up a pension pot).
Under the new system, as with the old one, those who contracted out will get less state pension than those who didn’t.
Millions of workers will also start to pay higher National Insurance as the end of contracting out in final salary schemes means they now pay full NI contributions.
If you were contracted out but carry on working for a number of years after 2016, making full-rate NI contributions, you can build up further state pension until you reach the full level of new state pension (£164.35).
What if I’ve been mainly contracted in?
The new rules mean that no one will lose any additional state pension they've accrued by making full National Insurance contributions.
Whichever value is the highest, under the old or new system, that will be your starting amount. If this is more than the new maximum full level of state pension (£159.55), you’ll get the higher amount.
How can I boost my state pension?
Your new state pension will be based on your National Insurance record when you reach state pension age.
You can increase what you’ll get by adding to your National Insurance record before reaching this age. You can carry on working and paying National Insurance contributions until you meet state pension age.
Defer your state pension – build up your state pension by delaying taking it.
New state pension - winners and losers
The average state pension payment under the previous system was £130 a week. Will those who qualify after April 2016 be better off under the new system? Some will - and others will be worse off.
The graphic shows the proportions of these, based on projections from the Department for Work and Pensions.
For example, in the period 2016-2020, some 51% of men who get the state pension for the first time will be better off, but 28% will be worse off (21% will get about the same - shown as amber).
New state pension winners
People in these groups will generally be better off under the new system:
- women, carers and the low paid who haven’t built up additional state pension
- self-employed people who didn’t qualify for state second pension
- people who were contracted out and can access their private pensions at age 55
- workers contracted out who have time to build up years of full NI contributions.
New state pension losers
These groups will generally be worse off, or no better off, under the new system:
- people with less than 10 years of NI qualifying years
- people with more than 35 years’ worth of full NI contributions
- high earners who won’t be able to build up more additional state pension (ASP)
- younger employees who will no longer be able to build up ASP
- spouses, civil partners, widows and widowers who will no longer be able to claim or inherit a state pension based on a partner’s NI contributions
- those already drawing the state pension won’t be affected
Am I better or worse off under the new state pension?
The new system favours those with lots of qualifying years or credits, but little additional state pension, in the early period.
People in their 50s and 60s will be the main beneficiaries, with 75% of those qualifying for the state pension set to gain in the first 15 years.
Some three million women will receive an average of £11 more per week by 2030 as a result of the changes.
The longer-term situation will change, with most younger workers in their 20s, 30s and early 40s being worse off.
The Department for Work and Pensions (DWP) figures show that 53% of current 43-year-olds will get a lower state pension when they qualify for it in 2040, rising to 76% for 24-year-olds who are due to reach state pension age in 2060.
The overall bill for the government will reduce to combat the fact that the population is ageing.
More people will gradually get less under the flat-rate system compared to what they would have got under the old rules.
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 October 2020 and 67 between 2026 and 2028.
It will rise to 68 between 2037 and 2039.
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.
Are you eligible? How do you qualify for the state pension? - read our guide to eligibility
How do I get a state pension statement?
You can currently get a state pension statement from the 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.
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