State pensions
National Insurance Credits
To help you carry on building up the state basic pension, you might be credited with contributions if you are in any of the following situations:
- caring for a child
- unable to work because of sickness or disability
- getting certain benefits
- in the years you reach 16, 17 and 18, if still in higher education and born after 5 April 1957
- on a course of approved training
- doing jury service
- serving a prison sentence for a conviction which is subsequently
quashed - you are a man aged 60 to 65 and not working (for example, because you have taken early retirement). This is to prevent you being discriminated against in comparison with women who currently reach state pension age (and so stop paying contributions) earlier than men. From 6 April 2010, these credits are being phased out in line with the increase in women’s state pension age from 60 to 65 (see the 'State pension age' table below).
How they work
Basic pension
Anyone who has paid (or been credited with) enough National Insurance contributions over their working life gets the state basic pension. The rules are changing so that, if you will reach state pension age on or after 6 April 2010, you need to have paid National Insurance contributions for 30 years to get a full pension (it used to be 44 years).
State additional pension
In 2002 the State Second Pension (S2P) replaced the State Earnings Related Pension (SERPS). Only employees could get SERPS, but carers and some people with a disability can get the S2P. You are not building up additional pension if you are
- self-employed,
- an employee on low earnings (less than £95 a week in 2009-10), or
- contracted out of S2P.
How much?
In 2009-10 the full basic pension for a single person is £95.25 a week. Married couples (and from 2010 same-sex couples who are registered civil partners) can claim extra. Unmarried couples cannot.
The amount of additional state pension you have built up used to depend on your eligible earnings over your working life since 1978. From 6 April 2009 onwards, it builds up at a flat-rate instead, which is the same for everyone. When you reach state pension age, you are likely to get a combination of the old earnings-related pension and the new flat-rate pension, so the total will vary from person to person.
When are they paid?
You cannot start receiving your state pension until you reach state pension age. This age is gradually being increased, depending on when you were born - see the table below.
State pension age
| Your date of birth | Pension age |
|---|---|
Before 6 April 1950 | 60 (women); 65 (men) |
6 April 1950 to 5 April 1955 | Between 60 and 65 (women); 65 (men) |
6 April 1955 to 5 April 1959 | 65 |
6 April 1959 to 5 April 1960 | Between 65 and 66 |
6 April 1960 to 5 April 1968 | 66 |
6 April 1968 to 5 April 1969 | Between 66 and 67 |
6 April 1969 to 5 April 1977 | 67 |
6 April 1977 to 5 April 1978 | Between 67 and 68 |
6 April 1978 onwards | 68 |
Protection for your family
A married person (and, from 6 April 2010 a same-sex civil partner) can claim state bereavement benefits or receive state pensions based on their spouse’s (or civil partner’s) National Insurance record. There is no similar protection for unmarried partners.
What does 'Contracted out' mean?
You are 'contracted out' if you are building up a pension in an occupational pension scheme or personal pension instead of the state additional pension.
Pension credit
Pension credit is a state benefit for pensioners on low incomes. It ensures they have at least a minimum amount to live on, and rewards people who have made their own modest savings for retirement. If you live with your partner, whether you are married, registered, or living together, your entitlement depends on your joint income.
Action you can take now!
- Request state pension forecasts (see 'Further help') to check how much state pension you each might get.
- If you have gaps in your National Insurance record (for example, because you took time out to study or travel), check whether paying voluntary Class 3 contributions would earn you extra basic pension but bear in mind that most people will need only 30 years of contributions to get the full pension.
