Will everyone get the same amount of State Pension?

Posted on: 25 May 2016 by James Hester

The new State Pension doesn’t mean £155.65 for all – ask for a State Pension Statement to be sure.

pension amount

The new State Pension has been introduced for people who reach State Pension age on or after 6 April 2016. Check your State Pension age here.

The introduction of the new State Pension on 6 April 2016 brings clarity to a system that few people truly understand. The reforms will reduce pensioner means-testing and support personal saving for millions of people.



How much will I get?

With the new State Pension, what you get takes into account what you’ve built up in the past. This depends on your National Insurance (NI) record built up over the past years. In order to know what amount of past State Pension you will bring into the new system, a starting amount will be calculated to reflect your past NI record.

This starting amount will be calculated taking into account your NI record up to 6 April 2016. If your starting amount is less than the full rate of new State Pension from then on every year you contribute a year of NI, you may add around £4.45 a week of new State Pension to your starting amount, up to the full amount (currently £155.65) or until you reach State Pension age. This article explains the old State Pension rules and how they changed with the introduction of the new State Pension for people reaching State Pension age from 6 April 2016. It does not cover every circumstance and some of the descriptions used simplify what can be complex information. More detailed fact sheets can be found on the State Pension toolkit on GOV.UK. We recommend that you get independent advice before making any financial decisions based on the information in the article. The article is written based on the position at May 2016.

Your starting amount will be the higher of what you would have got under either old rules or new rules up to 2016. Your starting amount could be less than, more than, or equal to the full amount.

If you have a starting amount which is less than the full amount, it may be because you were contracted-out of the old Additional State Pension. If you were contracted-out you will have paid less into the NI system in the past as a result of being a member of a workplace or personal pension system. In most cases, you can then add £4.45 a week for each year to this from 2016 onwards until you reach the full amount of new State Pension or your State Pension age.

It’s also good to know that if you are not in work at any point because of being a parent, carer or unemployed, you can still build your NI record to increase your State Pension up to the full new rate. Instead of paying contributions, you may be able to claim credits.

You can check your State Pension using a new online service. The service will help you find out how much State Pension you may get, the earliest you can get it and if you can improve it. Visit www.gov.uk/check-state-pension.



Get more

You may well need a good deal more than just the State Pension income to maintain the standard of living you are used to or fund the way you want to live in retirement. That’s why it’s worth thinking about how much income you want to get in retirement, and increasing your pensions saving now. The total income you get in retirement is the sum of your State Pension, your workplace pension and any other private savings you’ve made. So, to get the most out of your retirement, you need to save as much as you can in your pensions today.


Further Information

You can find out more about the State Pension at www.gov.uk/yourstatepension and www.youtube.com/pensiontube  


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