Recent state pension changes
On 6th April 2016, some significant changes were made to the state pension. Previously, there was a two tier state pension: you could get the full ‘basic state pension’ if you had at least 30 years of National Insurance contributions, and then depending on your level of National Insurance contributions, you may have been eligible to receive some ‘additional state pension’.
This system has now been replaced with a single ‘new state pension’. You can receive this if you’ve paid National Insurance contributions (or received credits) for at least 10 years, but you’re only eligible for the full amount if you’ve paid contributions for at least 35 years. Generally, you pay National Insurance contributions each year you’re working, but if you’ve been absent from work for a particular reason (to have a child or for long-term illness, for example) then you can receive credits instead, to protect your National Insurance record.
The full amount of state pension is currently £155.65 per week, but the amount you actually receive depends on your National Insurance record. The state pension figure is adjusted each year to take inflation into account.
If you reached state pension age before 6th April 2016, you’ll receive your state pension under the old rules. People who reach state pension age after this date will fall under the new system, although those who were working when the old pension system was in place may receive a higher amount so that they don’t lose out due to the changes. For more details, check the government’s website.
Changes to the state pension age
The age at which you can claim the state pension is changing too. For many years it was 65 for men and 60 for women, but it’s increasing and it will keep increasing over the next few decades. The plan is that eventually it will be calculated based on average life expectancy.
Future state pension changes
State pension rules are likely to continue to change as governments introduce new legislation. It’s quite possible that the state pension will be squeezed more in the future as governments try to save money, and that ministers will look for ways to incentivise personal and workplace pension saving instead.
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Last edited: 08-03-2017