How much is the new state pension and when can I get it?

A state pension is an income for life known as a guaranteed minimum payment. The full new state pension is £203.85 per week. (up from £185.15 a week in 2022).

The current age is 66 and will rise to 67 for those born on or after April 1960. The state pension went up in 2022 because of a government guarantee called the 'triple lock'.

Every year your pensions will rise in line with the greater, one of three options. The average earning, consumer price index or 2.5%

How many qualifying years do I need to get a new state pension?

To find out what you will get from your state pension when you retire, log into the UK Government Gateway. You will need a 12-digit government gateway ID. If you do not have a 12-digit government gateway ID. Click on users of the Government Gateway and create sign in details.

You will need an email address, which you will need to verify. And as part of the verification process, you will need to provide ID.

Once logged in, you can check your state pension forecast. You can see many statistics about your state pension. Such as how much state pension you'll, when you'll get it, your qualifying years and ways to increase it. It is very comprehensive!

You can claim the new state pension as long as you have 10 qualifying years on your national insurance record.

However, you will need at least 35 years to produce the full amount to get a full state pension. Therefore, if you have between 10 and 35 qualifying years, you'll get a proportion of the new state pension.

This should be either from paid employment or from national insurance credits. A pension credit can be given towards a qualifying year. For example, if you are a student or when you're claiming benefits because you're ill or unemployed. 

Do I need to pay any national insurance to get a state pension?

You don't need to pay national insurance contributions. Many company directors pay themselves £242 a week or £12,584 a year. This is to avoid national insurance contributions.

You must earn at least £123 per week or £6,396 annually for a qualifying year. A salary within this range lets you qualify for a state pension without paying having to pay anything.

Is the state pension any good?

This depends on your level of income during your qualifying years.  Someone on an income of £20,000 per year would pay 13.8% national insurance on any income over £12,584. This amounts to a national insurance payment for the employee of £1,023.

Multiplying this by 35 years means you would have paid £35,819 in national insurance contributions. In retirement, you will effectively get a pension of £10,600 from just a contribution of £35,819 if you worked for just 35 years.

If you compare this to current annuity rates, a £100,000 pension fund provides just £7,447 a year at age 65. This is after withdrawing a £33,333 tax-free lump sum. That’s for a single or joint life annuity. 

Pound for pound, paying national insurance contributions and claiming the state pension wins by a wide margin.

It is, therefore, imperative that the minimum qualifying years be paid in full.

Can I still work and claim a state pension?

Working and earning income after reaching the state pension age in the UK is allowed. However, you won't be required to pay national insurance contributions on your earnings beyond this point.

It's essential to be aware that your state pension is considered income. Therefore, could be subject to tax, depending on the total income you earn from various sources. 

There is no specific earnings limit for those who continue to work and receive the state pension in the UK. You can earn as much as you like. However, any income above the personal allowance is subject to taxation. 

Should I wait before taking my state pension?

Deferring your state pension for five years can increase your pension by half. There is no limit to how many years you wish to defer. You'll receive a 1 percent increase, for every nine weeks you defer.

Getting to just under a 5.8 percent increase over a year.  A smart choice would to defer the pension if you are still working. This would allow miss out a visit from the tax man.

What happens to my state pension if I move abroad?

When you're eligible to receive your state pension, you have flexibility. It can be paid into a bank account, whether you're in the UK or abroad.