I’m going to say straight away that this I'm not going to give a lot of information about State Retirement Pensions.
Here are the reasons:
- State Pensions are incredibly complex. How much you’re entitled to depends on so many different things that in practice it’s not feasible for me to write this page in a way that would help you work out what you’re entitled to.
- You may not have all the details of your national insurance history you need to enable us to work out your entitlement
- It’s a moving target: unless your just about to apply for your pension, the answer we get today may not be the same as the answer we get in three years time.
Fortunately it is fairly easy to get a prediction of how big your state pension will be by asking the government. This is possible because they (normally) have a full record of your work and benefit history.
This information is called a pension statement. It is available via the following link: https://www.gov.uk/state-pension-statement
You will then be able to:
- Ask for a full statement on how big your pension will be, based on what they know about your history, and when you will be able to get it;
- Get a quick estimate based on what you know about your work and benefit history, and when you will be able to claim it;
- Get information about when you will be able to claim a pension, based on your date of birth.
If you do want to know some basic details of how state retirement pension work, however, read on…
State Retirement Pensions:
- Are not income based (means-tested): if you are entitled to a pension you will get it whatever other money you have coming in.
- Are contribution based: the amount of pension you get is based on how many national insurance contributions you have made, and have been credited to you, over your working life (or, sometimes, based on your spouse or civil partner’s contributions - see below)
- You still get it even if you are working.
In April 2016 a new state pension was brought in. If you reach pensionable age on or after 6th April
2016 this is the pension you'll get (if you get a pension at all): if you reached pensionable age before
this date you'll get the old-style pension.
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State Retirement Pension if you reached pensionable age before 6th April 2016
There are three main types of State Retirement Pension:- Category A - this is the main one, based on your national insurance history.
- Category B - this is based on your spouse’s or civil partner’s contributions, and is only really useful if you cannot get a State Retirement Pension in your own right (you normally need to actually have been married to your spouse or formed a civil partnership with your partner, but you can often still get it if your spouse or civil partner has died)
- Category D - this is only available if you are 80 or over and can’t get any other state pension, or only a small one: the advantage to this pension is you don’t need to have a good national insurance history, you just need to have been resident in the UK for at least ten years in a row at some point in the 20 years before you claim it.
How much is each pension worth?
- Category A - the basic rate is currently £125.95 per week, but it might be less (even nothing) if your national insurance history isn’t good enough, or more (if various other things apply)
- Category B - the basic rate is currently £75.50 per week, but it might be less (even nothing) if your spouse or civil partner’s national insurance history isn’t good enough, or more (if various other things apply)
- Category D - this is currently £75.50 per week (and you either get all of it or nothing at all).
State Retirement Pension if you reach pensionable age on or after 6th April 2016
This is normally based on your national insurance contributions (like the old-style category A pension). The basic rate is £164.35. The contribution are a bit stricter than the pre-2016 pension. Just like the old style pension, you may get less if you haven't worked for enough years.Applying for your State Retirement Pension
You should get a letter from the Pensions Service 4 months before you reach pension age telling you that you will be able to get a state pension soon, but you still need to make a claim - it is not, normally, automatic.
You can start a claim by phoning the Pensions Service 0800 731 7898, or on line, at https://www.gov.uk/claim-state-pension-online . You can only claim online if you have received the ‘4 month letter’.
If you are getting some benefits when you reach pension age the claim may be processed automatically without you needing to do anything, but only rely on this if the Pensions Service tells you.
Deferring your State Retirement Pension
Although you might be eager to start getting your pension as soon as possible, you might want to think about putting off claiming your pension (the government call this ‘deferring’ your pension). Perhaps you are still working and are happy to continue for while, for example.
The advantage to this is that if you do put off claiming your pension you will get a larger pension - how much depends, amongst other things, on how long you defer your pension.
However, you do need to be careful. There’s no point in deferring your pension if you getting Pension Credit, or most other income based or contribution based benefits, as the Pensions Service will not increase your pension for any time that you’re getting them. For this, and other reasons, I give the following warning.
| Think
very carefully, and seek advice if you can, if you are thinking of
deferring your retirement pension. |