New state pension 



The new flat rate single-tier state pension was launched on 6 April 2016, replacing the basic state pension and additional state pension for people reaching the state pension age after that date. Employer-provided pension schemes can no longer contract out of the state pension and receive a national insurance rebate. 



The flat rate of the new state pension is £159.55 from April 2017, but many employees will not receive this full amount. The pension will be lower where there are gaps in the national insurance record, either because the person was not working, 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 complete years of NIC contributions or credits are needed for the full new state pension, and ten complete years are needed to qualify for any new state pension at all. It is possible to request a National Insurance Statement online to check for gaps in your national insurance record. In some cases, voluntary contributions can be paid to cover gaps. 



The state pension age is currently 65 for men and is gradually increasing for women from 60 to 65. From April 2017, it rose from 63 to 63-and-nine-months, and it will equalise at 65 for both men and women by November 2018. From December 2018, it will start to rise for both men and women, to reach 66 by October 2020. A further increase to age 67 is planned between 2026 and 2028.


The state retirement age is reviewed every five years, with the next review in May 2017. Any changes will be on top of the above increases but will not affect anyone who turns 67 before 2028.


Charity Age UK has useful factsheets on the new state pension and the state retirement age on its website: www.ageuk.org.uk/money-matters/pensions/new-state-pension/overview.