What is the State Pension
The State Pension is a valuable source of income in retirement, at Finatical we think this is unknown to many young adults in the UK. Here’s how it works.
How to qualify for state pension
To qualify you’ll need 35 qualifying years of National Insurance contributions (NICs). You may receive a reduced pension with fewer qualifying years.
State Pension Age UK
The State Pension age is currently 66 but is set to increase in the future. From 6 May 2026, the age will start increasing again and will reach 67 by 6 March 2028. Check the government website for the most up-to-date information – you can check your pension age here.
How to claim state pension
You won’t automatically receive the State Pension; you must claim it. You’ll receive a letter from the government with instructions on how to claim approximately four months before you reach the required age. There is the option to apply online, in both scenarios you’ll require the following the information according to Gov.uk:
- the date of your most recent marriage, civil partnership or divorce
- the dates of any time spent living or working abroad
- your bank or building society details
State Pension Amount 2023/24:
The full new State Pension for 2023-24 is £203.85 per week. Your actual pension amount may be higher or lower depending on your National Insurance Contributions and other factors.
FinaticalFacts
You can choose to defer claiming and by doing so may increase the weekly amount you receive when you do claim it. Minimum length of time to defer is nine weeks.
Additional Benefits
Some people may qualify for Pension Credit, which tops up your income if it’s below a certain threshold. Find out if you are eligible via an online calculator – Age UK offer a great pension credit calculator and its super easy to follow. Make sure you have information on things such as savings, income and investments.
How long can you defer?
You can choose to defer claiming and by doing so may increase the weekly amount you receive when you do claim it. Minimum length of time to defer is nine weeks. By deferring your pension you could pay less income tax whilst working.
Is the State Pension taxable?
Yes – subject to income tax if your total income exceeds the personal allowance.
Conclusion
Understanding how the State Pension works is essential for planning your retirement income. To ensure you receive the pension you’re entitled to, keep track of your NICs and consider seeking advice from a financial advisor.
George is the founder of Finatical and currently resides in Cardiff. He began writing for online sports websites and magazines before having his Italian football book – Calcio’s Greatest Forwards – published. Having graduated from Cardiff University, he went on to work for Yahoo! Sport, The i Paper and now Confused.com