While many people have some savings for retirement, most of
us will also depend on the State Pension to help cover our living costs. The
full new State Pension payment is currently £175.20 a week (2020/21 tax year),
but not everyone will receive the full amount and the age at which you’ll receive
If you reached State Pension age before 6 April 2016, you’ll
receive the basic State Pension. The most you can currently get from the basic
State Pension is £134.25 a week (2020/21).
Who is eligible for the state pension?
Eligibility for the State Pension is based on your National
Insurance record, that is, the number of years in which you’ve either made
National Insurance contributions (through employment or voluntarily) or
received National Insurance credits (while unemployed, ill or raising children,
To claim the full State Pension, you’ll need at least 35
qualifying years on your National Insurance record. If you have less than 35
but more than 10, you’ll be entitled to a reduced amount. With less than 10
qualifying years, you are not eligible for the State Pension.
When will you receive the state pension?
The current State Pension age is 66, but it is rising over
time. By 2028, it will be 67, and by 2046 it will increase to 68. Plans that
are currently being discussed could bring that increase forward to between 2037
and 2039, affecting anyone born after 1970.
How much will you receive?
The current full State Pension is £175.20 a week but will
increase to £179.60 on 6 April 2021. It will continue to increase every year,
either by 2.5%, by the average growth in earnings, or by the average growth in
prices (whichever is highest).
If you are eligible to a reduced State Pension based on your
National Insurance record, the amount you receive is based on the number of
qualifying years you have. You can estimate this amount by dividing the full
State Pension by 35 and multiplying by the number of years on your National
Insurance record, for example, for 10 years, your estimate would be around £50
If you’d like to increase the amount you are entitled to,
you could fill gaps in your National Insurance
record by making voluntary contributions.
Is the state pension enough to live on?
Even if you are entitled to the full State Pension, you
should have other savings to improve your standard of living in retirement. Most
people have some savings in a workplace pension, and you might also consider a
personal pension to help you reach your savings goal.
Retirement might seem a long way off. And if that’s the
case, then great, because you’re in the best position to start planning for
what should be the longest holiday of your life.
Building a better retirement?
No matter where you are on your retirement journey, to
discuss how much you’ll need to live on in retirement and how to save
effectively, please contact us to review your options.