The State Pension changed in the new tax year. The amount you can get rose in April and changes to the State Pension age are also being considered. Our guide to the UK State Pension changes explains what you need to know.
Knowing what to expect from your future State Pension, and when you can expect to get it can be an important part of planning for your life after work.
But over the course of the 100+ years that there has been a State Pension in the UK there have been many important changes to what you get, when you get it and how you claim it.
Our guide will keep you up to date with the latest changes and help you understand the role a State Pension can play in funding your life after work.
How much State Pension will I get?
The latest change announced was a 3.1% rise which came in with the new tax year – starting on 6 April, 2022. This was confirmed in last year's Autumn Budget and affects people eligible for the new flat-rate State Pension, which was introduced in April 2016, or the older basic State Pension.
The rise means those qualifying for a full new State Pension will receive £185.15 a week (up from £179.60).
Those who reached State Pension age before April 2016, who are on the older basic State Pension, will now receive £141.85 – up from £137.60.
How do I qualify for a full State Pension?
The amount of State Pension you receive is based on the number of years of National Insurance (NI) contributions you have paid or been credited with and when you start claiming it.
You can find out more about how the State Pension works, how you qualify, and how to claim by reading our guide, What is the State Pension?
There are government websites where you can check your personal NI record and get your State Pension forecast. More than 20 million forecasts have been checked online by people planning for retirement.
Can I make up for any missing years of NI contributions?
Gaps in your work history or being in certain types of pension schemes can mean you won’t have enough NI contributions to receive the full State Pension. But you may get NI credits for years when you’re not employed or have low earnings.
In some cases, claiming benefits such as jobseeker’s allowance can actually help you build and protect your State Pension entitlement.
You might also be able to top up your NI record by paying voluntary national insurance contributions.
You’ll find more detail at www.gov.uk/check-national-insurance-record
Changes to the State Pension age
Your State Pension age is the earliest age you can start receiving State Pension. You can check your State Pension age on the UK Government’s website.
Men born before 6 April, 1951 and women born before 6 April, 1953 can claim the basic State Pension now. If you were born on or after these dates, you’ll be eligible for the new State Pension when you reach your State Pension age.
But State Pension age is regularly reviewed to take into account things like affordability and life expectancy.
State Pension age rose to 66 last year and it is due to increase to 68 between 2044 and 2046. However, following a recent review, the UK Government announced plans to bring this timetable forward so that it becomes 68 between 2037 and 2039. Any change would have to be approved by the UK parliament but you can read more here about how the State Pension age increase proposals might affect you.
Remember that modern, flexible workplace and personal pension plans normally let you start taking your money from the age of 55, rising to 57 in 2028. So you could access your pension benefits before you receive your State Pension.
Is the State Pension likely to be enough?
Probably not. Even with the rise introduced in April, a full new State Pension would be just over £9,600 a year, which is a lot less than a minimum wage salary.
The reality is there’s a significant gap between what you get from the State Pension and what you may actually need or want in retirement. The State Pension alone will only cover a very basic lifestyle and, because it only starts in your late 60s, won’t help to support you if you want to retire earlier. So it should only be a part of your overall retirement plan. Also bear in mind that it is subject to tax – you can read more about this in our State Pension guide.
So, it’s important to fully understand how much you might need to save into your personal or workplace pension plan to potentially be able to afford the retirement you want. Our pension calculator can help you see if you’re on track for this.
Are there likely to be any further State Pension changes?
April’s increase reflects a change to the usual ‘triple lock’ guarantee applied to the State Pension. The triple lock usually means that payments rise each year by the highest of inflation, average earnings growth or 2.5%.
However, the average earnings growth measure was suspended by the Government for the 2022/23 tax year because a rise in wages following coronavirus would have meant a much higher increase in State Pensions.
It was described as a temporary suspension of one year due to exceptional circumstances and the Government has said the earning element of the triple lock will return next year. But this will have to be considered in the wider economic context including whatever new measures are introduced to help the post-pandemic recovery.
What can I do to help make sure that I have enough money when I retire?
Firstly, get informed so that you know what you’re likely to get from your State Pension, and when. And bear in mind that you might be able to top up your NI contributions to get more.
Secondly, think about taking steps to potentially boost the money you’ll get from your personal or workplace pension plan by increasing your contributions. Some employers also offer matching schemes, so doing this could mean your employer will pay in more too. You can find more information in our pension guides.
Don’t forget that you can also use savings such as ISAs (Individual Savings Accounts) to supplement the money you’ll get from any pension pots you have when you come to retirement age.
Remember that personal or workplace pension plans, as well as some types of ISAs, are investments and their value can go down as well as up and may be worth less than what was paid in.
It’s a good idea to regularly review your personal or workplace pension plan to make sure it’s on track. If you’re a Standard Life customer, you can do this through our online services. And if you want a full picture of all your pension plans, as well as your potential State Pension entitlement, use our simple pension calculator.
The information here is based on our understanding in May 2022 and shouldn’t be taken as financial advice.