State Pension (United Kingdom)
The State Pension is part of the United Kingdom Government's pension arrangements. Benefits vary depending on the age of the individual and their contribution record. Anyone can make a claim, provided they have a minimum number of qualifying years of contributions.
Basic State Pension
The basic State Pension (alongside the Graduated Retirement Benefit, the State Earnings-Related Pension Scheme, and the State Second Pension) is payable to men born before 6 April 1951, and to women born before 6 April 1953.
The maximum amount payable is £134.25 a week (6 April 2020 - 11 April 2021).
New State Pension
The new State Pension is payable to men born on or after 6 April 1951, and to women born on or after 6 April 1953.
The maximum amount payable is £175.20 a week (6 April 2020 - 11 April 2021).
The State Pension is a 'contribution-based' benefit, and depends on an individual's National Insurance (NI) contribution history. To qualify for a full pension (amounts given above), an individual would require:
- basic State Pension: 30 qualifying years (years in which NI contributions were paid),
- new State Pension: 35 qualifying years (years in which 52 weeks of NI contributions were paid; if only 51 or less weeks' NI were paid, the whole year is discounted) from 6 April 2016.
A smaller, pro-rata, pension is paid to someone with fewer qualifying years. People who were contracted-out paid lower NI contributions and will receive a lower state pension.
The Basic State Pension is increased in April each year to pensioners living in the UK and in certain overseas countries which have a Social Security Agreement with the UK that includes British pension uprating, in line with the CPI. All state pensions for these pensions are protected by the "triple lock" guarantee introduced by the coalition government, meaning that the pension rises each year by either the annual price inflation, or average earnings growth, or a guaranteed 2.5% minimum, whichever is the greatest. Coming into effect each April, the uprating is based on the previous September's CPI inflation, along with the three-month average of weekly earnings starting in July of that year.
Pensioners living in other countries without a current agreement (which includes most Commonwealth countries) have their pensions frozen at the rate in effect on the date when they left the UK, or on the date when they applied for a pension, whichever is later.
State Pension age
Before the Pensions Act 1995, the state pension age had been 60 for women, and 65 for men. The Act changed this so that the women's pension age would be made equal with men, but that the transition should only phased in from 2010 to 2020. In 2006, a cross party Parliamentary report again recommended equalisation of ages on the basis of equal treatment of both sexes. It also recommended a rise in the state pension age for both men and women to 68 between 2024 and 2046. The rationale for the age rise was that people would be living longer in the future. This was put into effect by the Pensions Act 2007.
However, when the Conservative and Liberal-Democrat coalition took power, the Pensions Act 2011 cut pension rights by accelerating the rise of the state pension age to 66 for both men and women by 6 October 2020. Under the Pensions Act 2014, the coalition government again cut pension rights and accelerated the rise in the state pension age to 67 by 6 April 2028.
In May 2019, a challenge in the High Court failed to reverse decisions to accelerate the equalisation of the pension ages on the ground that not enough notice was given. The Conservative Party in its 2019 Manifesto has said it will not change the rules, while the Labour Party has committed to compensating women who were unfairly affected by the changes in the pension age.
The current ages for the state pension in law are as follows:
Women born between 1947 and 1953
|date of birth from||to||date of reaching SPA|
|5 April 1950||age 60|
|6 Apr 1950||5 May 1950||6 May 2010|
|6 May 1950||5 Jun 1950||6 Jul 2010|
|6 Jun 1950||5 Jul 1950||6 Sep 2010|
|6 Jul 1950||5 Aug 1950||6 Nov 2010|
|6 Aug 1950||5 Sep 1950||6 Jan 2011|
|6 Sep 1950||5 Oct 1950||6 Mar 2011|
|6 Oct 1950||5 Nov 1950||6 May 2011|
|6 Nov 1950||5 Dec 1950||6 Jul 2011|
|6 Dec 1950||5 Jan 1951||6 Sep 2011|
|6 Jan 1951||5 Feb 1951||6 Nov 2011|
|6 Feb 1951||5 Mar 1951||6 Jan 2012|
|6 Mar 1951||5 Apr 1951||6 Mar 2012|
|6 Apr 1951||5 May 1951||6 May 2012|
|6 May 1951||5 Jun 1951||6 Jul 2012|
|6 Jun 1951||5 Jul 1951||6 Sep 2012|
|6 Jul 1951||5 Aug 1951||6 Nov 2012|
|6 Aug 1951||5 Sep 1951||6 Jan 2013|
|6 Sep 1951||5 Oct 1951||6 Mar 2013|
|6 Oct 1951||5 Nov 1951||6 May 2013|
|6 Nov 1951||5 Dec 1951||6 Jul 2013|
|6 Dec 1951||5 Jan 1952||6 Sep 2013|
|6 Jan 1952||5 Feb 1952||6 Nov 2013|
|6 Feb 1952||5 Mar 1952||6 Jan 2014|
|6 Mar 1952||5 Apr 1952||6 Mar 2014|
|6 Apr 1952||5 May 1952||6 May 2014|
|6 May 1952||5 Jun 1952||6 Jul 2014|
|6 Jun 1952||5 Jul 1952||6 Sep 2014|
|6 Jul 1952||5 Aug 1952||6 Nov 2014|
|6 Aug 1952||5 Sep 1952||6 Jan 2015|
|6 Sep 1952||5 Oct 1952||6 Mar 2015|
|6 Oct 1952||5 Nov 1952||6 May 2015|
|6 Nov 1952||5 Dec 1952||6 Jul 2015|
|6 Dec 1952||5 Jan 1953||6 Sep 2015|
|6 Jan 1953||5 Feb 1953||6 Nov 2015|
|6 Feb 1953||5 Mar 1953||6 Jan 2016|
|6 Mar 1953||5 Apr 1953||6 Mar 2016|
|6 Apr 1953||5 May 1953||6 Jul 2016|
|6 May 1953||5 Jun 1953||6 Nov 2016|
|6 Jun 1953||5 Jul 1953||6 Mar 2017|
|6 Jul 1953||5 Aug 1953||6 Jul 2017|
|6 Aug 1953||5 Sep 1953||6 Nov 2017|
|6 Sep 1953||5 Oct 1953||6 Mar 2018|
|6 Oct 1953||5 Nov 1953||6 Jul 2018|
|6 Nov 1953||5 Dec 1953||6 Nov 2018|
Men and women born after 5 Dec 1953
|date of birth from||to||SPA or date of reaching it|
|6 Dec 1953||5 Jan 1954||6 Mar 2019|
|6 Jan 1954||5 Feb 1954||6 May 2019|
|6 Feb 1954||5 Mar 1954||6 Jul 2019|
|6 Mar 1954||5 Apr 1954||6 Sep 2019|
|6 Apr 1954||5 May 1954||6 Nov 2019|
|6 May 1954||5 Jun 1954||6 Jan 2020|
|6 Jun 1954||5 Jul 1954||6 Mar 2020|
|6 Jul 1954||5 Aug 1954||6 May 2020|
|6 Aug 1954||5 Sep 1954||6 Jul 2020|
|6 Sep 1954||5 Oct 1954||6 Sep 2020|
|6 Oct 1954||5 Apr 1960||66 years|
|6 Apr 1960||5 May 1960||66 years 1 month|
|6 May 1960||5 Jun 1960||66 years 2 months|
|6 Jun 1960||5 Jul 1960||66 years 3 months|
|6 Jul 1960||5 Aug 1960||66 years 4 months|
|6 Aug 1960||5 Sep 1960||66 years 5 months|
|6 Sep 1960||5 Oct 1960||66 years 6 months|
|6 Oct 1960||5 Nov 1960||66 years 7 months|
|6 Nov 1960||5 Dec 1960||66 years 8 months|
|6 Dec 1960||5 Jan 1961||66 years 9 months|
|6 Jan 1961||5 Feb 1961||66 years 10 months|
|6 Feb 1961||5 Mar 1961||66 years 11 months|
|6 Mar 1961||5 Apr 1977||67 years|
|6 Apr 1977||5 May 1977||6 May 2044|
|6 May 1977||5 Jun 1977||6 Jul 2044|
|6 Jun 1977||5 Jul 1977||6 Sep 2044|
|6 Jul 1977||5 Aug 1977||6 Nov 2044|
|6 Aug 1977||5 Sep 1977||6 Jan 2045|
|6 Sep 1977||5 Oct 1977||6 Mar 2045|
|6 Oct 1977||5 Nov 1977||6 May 2045|
|6 Nov 1977||5 Dec 1977||6 Jul 2045|
|6 Dec 1977||5 Jan 1978||6 Sep 2045|
|6 Jan 1978||5 Feb 1978||6 Nov 2045|
|6 Feb 1978||5 Mar 1978||6 Jan 2046|
|6 Mar 1978||5 Apr 1978||6 Mar 2046|
|6 Apr 1978||68 years|
It is possible to defer claiming a State Pension at SPA.
For individuals who reached SPA before 6 April 2016, deferred pensions are increased by 1% for every 5 weeks that the pension is not claimed (approximately 10.4% per year). Alternatively pensioners who have deferred their pension can claim a lump sum and an unenhanced pension. The lump sum is the amount of pension payments foregone plus interest at 2% per year over the Bank of England base rate.
For individuals who reach SPA on or after 6 April 2016, deferred pensions are increased by 1% for every 9 weeks that the pension is not claimed (approximately 5.8% per year).
The basic State Pension is based on the National Insurance record of the individual. Each year that National Insurance was paid is called a qualifying year. For 2012–2013 to be a qualifying year you need to earn at least £5564 if you are an employee, or £5595 if you are self-employed, and have paid (or been credited with) National Insurance contributions based on these earnings.
Men born after 5 April 1945 and women born after 5 April 1950 need 30 qualifying years for a full Basic State Pension, with a single qualifying year required to get any State Pension. Men born before 6 April 1945 needed 44 qualifying years for a full basic State Pension, and women born before 6 April 1950 needed 39 years; to get any State Pension, an individual needed 25 per cent of the qualifying years required for a full pension.
Since April 6, 2016, 35 qualifying years are needed to receive the full new state pension. State Pension amounts can be reduced if the pensioner was in a contracted-out works pension scheme.
Individuals with less than a full record of qualifying years, may elect to pay voluntary National Insurance contributions, in order to boost their record for pension purposes.
People in certain circumstances, such as caring for a severely disabled person for more than 20 hours a week or claiming unemployment or sickness benefits, can claim National Insurance credits.
The amount of the basic State Pension received is calculated by multiplying the full rate by the number of qualifying years and dividing by the number of years needed for the full rate.
NI contributions paid between April 1961 and April 1975 result in an entitlement to a small[clarification needed] Graduated Retirement pension.
NI contributions paid between April 1978 and April 2002 result in an entitlement to an additional pension from the State Earnings Related Pension Scheme, although this will be very small[clarification needed] if the individual was "contracted out" of this arrangement. Since April 2002 NI contributions have earned an additional State Second Pension.
A wife or husband can claim extra basic State Pension based on the National Insurance contributions paid by his or her husband or wife (this extra is called a Category B pension).
If a woman has a Category A basic State Pension of less than 60 per cent of the full basic State Pension, then when she reaches her State Pension Age, she will have her basic State Pension topped-up to 60 per cent of her husband's Category A basic State Pension, once her husband reaches pension age.
Men, born after 5 April 1945, are able to claim a Category B pension based on their wives' contribution record. Similarly, civil partners who reach State Pension Age on or after 6 April 2010 are able to claim a Category B pension on the same basis.
Married women with young children and carers can claim credits of National Insurance contributions.
An 'age addition' of 25p a week is paid to people over 80.
Pensions Act 2007
A new approach was introduced following the findings of the all-party Pension Commission in 2006 and the white paper Security in retirement: towards a new pension system published in May 2006. The key provisions were:
- Reduction of the qualifying years for a full basic State Pension from 44 years for men and 39 years for women to 30 years for both.
- The basic State Pension's yearly increase is determined by a rule known as the “triple lock”, it being the greatest of:
- the growth in national average earnings;
- the growth in retail prices as measured by the Consumer Price Index;
- 2.5 per cent.
- The contribution conditions for basic State Pension were changed so that it is easier for everyone to build up some entitlement.
- Replacing Home Responsibility Protection (HRP) with a new system of weekly credits for parents and carers.
- Raising the State Pension age for both women and men from 65 to 68 in three stages between 2024 and 2046.
- Introducing National Insurance credits for parents and carers so that they can build up some entitlement to the Additional State Pension.
- End of the option to contract out of the Additional State Pension through money-purchase private pensions.
Some modifications to this were made in the Pensions Act 2008.
Future flat-rate state pensions
The Government originally proposed that in April 2017 the Basic and Second State Pensions should both be replaced by a single, flat-rate pension. A green paper was issued in April 2011, followed by a White Paper in January 2013. The amount of an individual's flat-rate pension would depend on the number of qualifying years, with 35 qualifying years being needed for the maximum pension and pro-rata amounts for fewer qualifying years, subject to a minimum of about 8 years. Rights already earned to a Second State Pension would not be lost. In the 2013 budget it was announced that introduction of the single tier pension will be brought forward by one year to 6 April 2016.
The new "single-tier" State Pension would be worth £144 a week (in 2012-13 terms). Provided they have 35 qualifying years, individuals would actually receive £144 a week, plus a "protected amount" if they have already earned a second State pension greater than £37 a week (which is the difference between the current basic State Pension and the proposed flat-rate pension), and minus a "rebate-derived amount" if they have paid smaller National Insurance contributions because they were "contracted out" of the Second State Pension Scheme (or its predecessor, the State Earnings Related Pension Scheme).
The new, single-tier State Pension would eventually remove the need for Pension Credit. It is also proposed that various rules regarding marriage, divorce and bereavement would be phased out. This would mean that Category B pensions (see above) would be replaced by Category A pensions for everyone, although any rights to a Category B pension that existed at the implementation date would be preserved.
Chancellor Philip Hammond hinted the State Pension would no longer be ring-fenced from spending cuts after 2020 – raising for the first time the prospect of pensioners' benefits being cut as part of the government's austerity measures. Benefits for the elderly had been exempt from reductions and the chancellor confirmed during the Autumn Statement 2016 that the state pension would continue to rise until at least 2020.
- Pension Credit
- State Earnings-Related Pension Scheme
- State Second Pension
- Pension provision in the United Kingdom
- Women Against State Pension Inequality
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