The UK State Pension is a regular payment from the UK government to people who reach the State Pension age (66 years in 2023) and meet other criteria.

How much pension do you get?

That depends on whether you’re eligible for the old or the new State Pension system:

Let’s explore the finer nuances of State Pension in the United Kingdom.

Old vs New State Pension in the UK (+ Eligibility)

Before we dive into the UK’s pension systems, let’s learn about the State Pension age. 

The State Pension age is the minimum age (66 years old, as of 2023) at which you can claim State Pension in the UK. It could differ from when your workplace or personal pension plan kicks in. 

You could be eligible for pension under the old or new rule based on when you reach the State Pension age. 

1. What is the Old State Pension in the UK?

The old State Pension applies to people who reached the UK State Pension age before the 6th of April 2016.

Under the old rules, the pension comprises of: 

• Basic State Pension: The base pension entitlement built through National Insurance (NI) contributions.

• Additional State Pension: The extra amount accrued through various government schemes.

These are linked to the qualifying years you achieve during your employment years.

What’s a qualifying year?

A National Insurance qualifying year is a tax year (April to April) during which you did one OR more of the following:

• Made Class 1 NI contributions (payable at 12% for weekly earnings between £242.01 to £967 in 2023-24) through sufficient employment earnings. For weekly income between £123 to £242,  you’ll be treated as making NI contributions at a 0% rate.

• Made Class 2 contributions if you’re currently (or previously) self-employed — payable at £3.45 per week for profits exceeding £12,570 in the tax year 2023-24. For profits between £6725 to £12,570, your NI contributions will be considered paid for. If your profits are less than £6725, you may still choose to make voluntary contributions.

• Earned enough National Insurance Credits to fill gaps in the National Insurance record. You may acquire these credits if you’re on certain qualifying benefits like Jobseeker’s Allowance, Carer's Allowance, sick pay, and maternity/paternity pay.

• Made voluntary National Insurance contributions to plug gaps in your NI records. In 2023-24, the voluntary contribution rate is £17.45 weekly.

What’s the Eligibility for Basic State Pension?

It depends on your birth year, gender, and NI contributions.

A. If You’re a Woman 

• You must be born before 6th April 1953

• Minimum NI contributions (for partial Pension amount)

  • Born before 6th April 1950: At least 10 qualifying years

  • Born between 5th April 1950 and 6th April 1953: At least 1 qualifying year

• NI Contributions for full Basic State Pension

  • Born before 6th April 1950: 39 qualifying years

  • Born between 5th April 1950 and 6th April 1953: 30 qualifying years

B. If You’re a Man

• You must be born before 6th April 1951

• Minimum NI contributions (for partial Pension amount):

  • Born before 6th April 1945: At least 11 qualifying years

  • Born between 5th April 1945 and 6th April 1951: At least 1 qualifying year

• NI Contributions for full Basic State Pension:

  • Born before 6th April 1945: 44 qualifying years

  • Born between 5th April 1945 and 6th April 1951: 30 qualifying years

C. If You’re a Transgender Person

Your eligibility for State Pension depends on whether you reached the State Pension age before or after the Gender Recognition Act 2004 came into effect.

If you were born between 24th December 1919 and 3rd April 1945 AND have proof of a gender reassignment surgery done before 4th April 2005, you could claim equal treatment rights. 

If you satisfy equal treatment conditions, you can request an ‘expression of interest’ form from the Pension Service for backdated State Pension.

Additional State Pension in the UK

The Additional State Pension is an extra amount you could get on top of your Basic State Pension.

You’re eligible for the Additional State Pension if:

• You do not benefit from a contracted-out pension scheme, AND

• You’ve built the entitlement to an additional pension through these four government schemes that were active at different periods:

  • Graduated Retirement Benefit (1961-1975)

  • State Earnings Related Pension Scheme, or SERPS (1978 to 2002)

  • State Second Pension, or S2P (2002 to 2016)

  • State Pension top up (2015-2017)

2. What is the New State Pension in the UK?

People who reach the State Pension age on or after 6th April 2016 get paid under the new pension rules. 

What’s the Eligibility for the New State Pension?

A. If You’re a Woman

• You must be born after 6th April 1953

• You must have at least 10 qualifying years for a partial rate new State Pension and 35 qualifying years for a full new State Pension (these can be before or after April 2016)

B. If You’re a Man

• You must be born after 6th April 1951

• You must have at least 10 qualifying years for a partial rate new State Pension and 35 qualifying years for a full new State Pension (these can be before or after April 2016)

C. If You’re a Transgender Person

• If you reach the State Pension age after 4th April 2005 AND have a Gender Recognition Certificate:

  • You must have the required qualifying years as per your acquired gender (see conditions A and B we covered above) to claim the State Pension.

• You may be eligible for backdated State Pension if:

  • You were born between 31 October 1953 and 6 November 1953

  • You had lived in your acquired gender for at least 2 years by 31 October 2018

  • You have had gender reassignment surgery

How Much Is State Pension in the UK?

• The full Basic State Pension is £156.20 per week for 2023-24.

• The full new State Pension Rate is £203.85 per week for 2023-24.

Why the difference?

Let’s understand the math behind the new and old State Pension systems.

1. Old State Pension Pay Rates

Under the old rule, you can get a maximum basic State Pension of £156.20 per week in 2023 (for 30 qualifying years).

If you have less than 30 years of contributions, you’ll get a fraction of the full amount based on the number of years of NI contributions.

Want an example?

If you have 12 qualifying years at the time of claim, you’re entitled to £62.48 per week — 12/30th of the full amount (£156.20)

Unless you benefit from a contracted-out scheme, your National Insurance contribution also gives you rights to an Additional State Pension. 

However, this extra State Pension amount isn’t fixed and depends on your qualifying years, earnings, and whether you’ve topped up your pension with schemes like State Second Pension.

2. New State Pension Pay Rates

In 2023, the UK's full new State Pension rate is £203.85 per week (for 35 qualifying years of NI contributions).

If you have between 10 to 34 years of contributions, you’ll get a fraction of the full amount proportional to the number of qualifying years (similar to the Basic State Pension).

Contributions above 35 years won’t add to the maximum new State Pension amount.

But look:

The New State Pension calculation might not be as straightforward if you’ve accrued NI contributions or credits from the pre-2016 system.

How Is Your New State Pension Amount Worked Out?

The first step is to arrive at the Starting Amount for your New State Pension, which is done by considering your pre-2016 contributions.

The Starting Amount is the higher of:

• The amount of State Pension you’d receive under the old rule (Basic + Additional State Pensions)

• The sum you would receive had the New pension rule been in place when you began working.

This Starting Amount will affect your New State Pension amount as follows:

• If your Starting Amount is more than the full amount of the New State Pension (£203.85 in 2023), you’ll get the additional amount (known as the ‘Protected Amount’) on top of the full amount when you start getting the new State Pension.

• If your Starting Amount is lower than the full amount of the new State Pension, you could build up your State Pension amount by accruing NI contributions and NI credit from 6 April 2016 till you reach the full new State Pension amount or the State Pension age (whichever happens first).

How Can You Increase Your UK State Pension Amount?

You can get an amount higher than the full State Pension under three scenarios:

• If you built up Additional State Pension (applicable under the old rule)

• If you ‘defer’ claiming your State Pension when it's due. When you claim it, you’ll get a higher weekly pension or a lump sum amount. If you’re already claiming State Pension, you can still choose to defer it (only allowed once).

• If you inherit the pension of your spouse or civil partner. 

What’s more?

If your pension amount is less than the full rate due to gaps in your National Insurance record, you can make voluntary contributions or claim NI credit to build up the amount.

Still confused about your pension amount?

Use the State Pension Forecast online service at www.gov.uk/check-state-pension or contact the government’s Future Pension Centre at:

• Telephone: 0800 731 0175

• Telephone from outside the UK: +44 (0)191 218 3600

Remember:

You won't start getting the State Pension automatically once you reach the State Pension age. You need to apply for it.

When Can You Apply For the New State Pension in the UK?

You can apply for the State Pension up to four months prior to reaching the State Pension age.

However, the payment will start only when you reach the State Pension age. 

You’ll typically receive an invitation letter from the Pension Service at least two months before you reach the State Pension age. It’ll contain an invitation code (needed when applying for State Pension online) and other details about the claim process.

What if you apply after reaching the State Pension age?

You can request backdating of your State Pension for a maximum period of up to 12 months. But you’ll not get any interest on the backdated lump sum pension amount.

If you backdate your pension claim for more than 12 months after you reach the legal pension age, you’ll be considered to have ‘deferred’ your pension (which could affect your pay rates).

How Do You Claim UK State Pension?

To make a State Pension claim, you’ll need to provide your personal details, including:

• Your National Insurance number

• The date of your most recent marriage, civil partnership, or divorce

• Dates of any time spent living or working abroad

• Your society building or bank details

• The invitation code from the letter you received from Pension Service

Here are the different ways you can make the claim:

• Apply online: Visit www.gov.uk/get-state-pension and ​​complete the necessary application process through the invitation code you received.

• Via Phone: You can call the UK Pension Service to claim your State Pension or request a physical pension claim form on:

• Telephone: 0800 731 7898 (open Monday to Friday, 8 am to 6 pm except for public holidays)

  • Textphone: 0800 731 7339

  • Relay UK (for people with hearing or speech difficulties): 18001 then 0800 731 7898

• Apply by post: Fill out the pension claim form and send it to:
  Pension Service 8

  Post Handling Site B

  Wolverhampton

  WV98 1AF

Contact the Northern Ireland Pension Centre to get the claim form if you're applying from Northern Ireland.

Do you live abroad? 

Contact the International Pension Centre or fill out the international claim form at www.gov.uk/government/publications/guidance-on-claiming-a-state-pension-if-you-retire-abroad.

How Is UK State Pension Paid?

Your State Pension (plus any Additional State Pension) is paid every four weeks directly to either:

• Your bank account or building society account

• A Post Office or National Savings account that accepts Direct Debit payment.

The day your pension is paid depends on your National Insurance number.

What Are Some Alternatives to State Pension in the UK?

If you’re not eligible for State Pension, you can still claim other social benefits for older people.

Some alternatives to the State Pension in the UK are:

• Pension Credit: Pension Credit is a top-up to the State Pension to support low income individuals who are eligible.  

• Other social benefits: Other helpful benefits for senior citizens in the UK include:

  • Older Person’s Bus Pass: Free bus travel when you reach the State Pension age

  • Housing Benefit: Covers housing rent for low income individuals over the State Pension age.

• Workplace or personal pension: These are private pension plans you can set up yourself or through your employer.

• Private retirement benefits package: Some employers provide private retirement benefits as part of their employee benefits in the UK.

Other FAQs Around UK State Pension

1. When Does the State Pension Age Increase Next?

The current State Pension age of 66 years (for both genders) is set to rise to 67 by 2028 and then to 68 by 2039. 

The UK Pensions Act 2014 legislates periodic review of the State Pension Age, considering several factors like changes in life expectancy.

Note: As we mentioned earlier, transgender people are eligible for State Pension as per their acquired gender under the new Pension rule.

2. Can You Claim State Pension and Keep Working?

You can keep working and claim UK State Pension without age restrictions, as the retirement age limit of 65 no longer applies.

The bad news?

• It may affect your entitlement to other benefits like Pension Credit, Housing Benefit, and Council Tax Reduction. 

• State Pension is taxable, and earning a regular income alongside it may put you in a higher tax band.

3. Can You Delay Receiving State Pension?

You can defer receiving State Pension for a higher weekly payment OR a one-off lump sum. 

The amount of increase and the minimum time limit for deferring varies for old and new pension systems.

• Under the new pension rule, you’ll need to defer the pension for at least 9 weeks — for which you’ll get a 1% increase (amounting to a 5.8% gain for one year of deferral). So if you get the full pension amount in 2023 (£203.85 per week), you’ll receive an extra £11.82 per week if you defer for a year.

• Under the old rule, the State Pension increases by 1% for a minimum of 5 weeks of deferral — or 10.4% yearly.

4. Would You Get State Pension Benefits If You’re Retiring Abroad?

You can claim State Pension abroad if you’ve paid enough National Insurance contributions to qualify. 

But you’ll get the yearly pension increases only if you live in a country part of the European Economic Area (EEA) or have a social security agreement with the UK, like Iceland and Canada.

If you’ve previously worked (or have retired) in another country, you may claim that country’s State Pension in addition to the UK State Pension.

5. Can You Inherit State Pension From Your Spouse Or Civil Partner?

You may be able to inherit some of your deceased partner's State Pension or protected payment. The amount will depend on their NI contributions and the starting date of your marriage or partnership. 

Supplement Your Employees’ State Pension With a Workplace Pension

In a 2023 study by the King’s College, London, participants found the UK State Pension inadequate for a comfortable retirement. 

They’ll have to supplement it with other income like a workplace pension. 

According to UK law, all employers must provide a workplace pension scheme and automatically enrol eligible employees in it. 

Looking to set up a workplace pension scheme for your UK team? 

Use Yonder — a digital pension app built for modern teams. It lets you:

• Set up and manage compliant UK pension offerings remotely.

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