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State Pension  Summary at February 2013

 Who gets the state pension?

Most people will qualify for at least some state pension when they retire. There are two main parts: a basic pension which nearly everyone gets; and an additional pension (commonly known in the past as SERPS) that you may be building up if you are an employee or if you cannot work because of caring responsibilities or a long-term health condition.

UK state pension age

The earliest you can claim your state pension is from state pension age. Currently this is 65 for men. For women, it is rising between April 2010 and November 2018 from 60 to 65. It will increase to 66 for both men and women by October 2020 and then again to 67 between 2026 and 2028.

The government has also announced that it will link state pension age to longevity. In other words, the longer we live for, the higher state pension age will be. It will carry out a review of state pension age every five years.  

The basic state pension

You build up the basic pension by paying National Insurance contributions while you are working. In some situations - for example, if you are off work because of illness or unemployment - you are credited as if you had paid contributions. Each year for which you have enough National Insurance contributions or credits counts as a 'qualifying year'.

If you have at least 30 qualifying years, this entitles you to the full basic state pension (£107.45 a week in 2012-13). If you have fewer than 30 years, you qualify for less.

The additional state pension

The additional state pension is now called the State Second Pension (S2P) but you might remember it by its earlier name, the State Earnings-Related Pension Scheme (SERPS).

Employees build up additional pension while working unless they are 'contracted out'. Contracting out means you give up some additional pension and instead some of your National Insurance contributions are used to fund a pension from anoccupational pension scheme

 or a personal pension. To learn more about contracting out, use the online tool on The Pensions Advisory Service (TPAS) website (

Since it started in 1978, the additional state pension has been earnings-related, so people on higher earnings build up more pension than people on lower earnings. However, the additional pension is now gradually shifting to become a flat-rate scheme so that eventually the full rate will be the same standard amount for everyone. People caring for a child under the age of 12 or for a person with a disability, and others claiming benefits because they themselves have a long-term health problem are already credited with a standard amount of additional pension.

Because contracting out is more popular with higher earners, the average amount of additional pension currently payable tends to be low (£26 a week in 2010*).

How much you may get

To find out how much state pension you are on track to get, you can order a state pension statement through Gov.UK or call  0845 3000 168.

Ways to increase your state pension

Your basic state pension may be reduced if you have gaps in your National Insurance contribution record that reduce your qualifying years below the 30 needed. You may be able to fill gaps during the last six years by opting to pay voluntary Class 3 contributions (which cost £13.25 in 2012-13). For more information, see the HM Revenue & Customs website at

You can also increase your state pension if you do not start it straight away when you have reached state pension age. This is called deferring your state pension.

Changes on the way

The basic state pension and additional state pension are being replaced with a single state pension payable at a full rate of £144 a week. The government intends to implement the changes in April 2017 at the earliest. For more details see the 8th March 2013 Telegraph article at  But things may still change

*Office for National Statistics, Pension Trends, Chapter 5, October 2011.

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