State pensions have changed in the last few years with a new allowance introduced in 2016. At the moment, the full new State Pension is equal to £168.60 a week but will increase by 3.9 percent to £175.20 in April 2020.
Does everyone get a State Pension?
There are two types of State Pension – basic and new – and the one you receive is based on when you were born.
Men born before April 6, 1951 and women born before April 6, 1953 are eligible for the basic State Pension.
Men born on or after April 6, 1951 and women born on or after April 6, 1953 receive the new State Pension.
Usually people need to have at least 10 qualifying years on their National Insurance record to get any State Pension, but these do not have to be 10 qualifying years in a row.
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This means that for a total of 10 years, at least one or more of the following applied:
you were working and paid National Insurance contributions
you were getting National Insurance credits for example if you were unemployed, ill or a parent or carer
you were paying voluntary National Insurance contributions
People who have lived or worked abroad may still be entitled to some new State Pension.
You might also qualify if you’ve paid married women’s or widow’s reduced rate contributions.
The full new State Pension is £168.60 per week and the actual amount you receive depends on your National Insurance record.
The only reasons the amount can be higher are if you have over a certain amount of Additional State Pension or you defer (delay) taking your State Pension.
Only those who have made 35 years of contributions will qualify for the new, full state pension.
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The first payment is made within five weeks of reaching State Pension age.
A full payment is transferred to an account of your choice every four weeks after that and is paid in arrears.
In order to receive the pension, you must claim it as it is not paid automatically.
You can claim your new State Pension even if you carry on working, however, you have the option to defer which can increase the amount you get.
Your National Insurance record before April 6, 2016 is used to calculate your ‘starting amount’ as part of your new State Pension.
Your starting amount will be the higher of either the amount you would get under the old State Pension rules (which includes basic State Pension and Additional State Pension) or
the amount you would get if the new State Pension had been in place at the start of your working life.
You can get more State Pension by adding more qualifying years to your National Insurance record after April 5, 2016.
Each qualifying year on your National Insurance record after April 5, 2016 will add about £4.82 a week to your new State Pension and the exact amount you get is calculated by dividing £168.60 by 35 and then multiplying by the number of qualifying years after April 5, 2016.
The new State Pension increases each year by whichever is the highest:
- earnings – the average percentage growth in wages (in Great Britain)
- prices – the percentage growth in prices in the UK as measured by the Consumer Prices Index (CPI)
- or 2.5 percent.
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