New state pension

The new flat rate single-tier state pension was launched in April 2016, replacing the basic state pension and additional state pension for anyone who reached the state pension age after that date. Since that date, employer-provided pension schemes can no longer contract out of the state pension and receive a National Insurance rebate.

The weekly flat rate is £179.60 from April 2021 (£9,339.20 a year). Many will not receive this full amount. Their pension will be lower if there are gaps in the National Insurance record, either because they were not working, not earning enough to pay NICs, worked overseas or for an employer that “contracted out” of the additional state pension because they were paying into a more generous company scheme.

Thirty-five full years of NIC contributions or credits are needed for the full new state pension, and ten complete years are needed for any new state pension at all. A National Insurance Statement can be requested online to check for gaps in your NIC record. Sometimes voluntary contributions can be paid to cover any gaps.

The state pension age is gradually increasing for both men and women. In December 2018, it equalised at 65 for both sexes and it increased to 66 in October 2020. A further increase to age 67 is expected between 2026 and 2028 and to 68 in 2037-39.