State Pension (United Kingdom)
The State Pension is an existing benefit that forms part of the United Kingdom Government's pension arrangements. Benefits vary depending on the age of the individual and their contribution record. Currently anyone can make a claim, provided they have a minimum number of qualifying years of contributions.
People who reached state pension age before 6 April 2016 receive the pre-2016 or "old" State Pension, which consists of a basic flat-rate amount and an additional earnings-related pension that reflects a person's earnings history. People who reach state pension age on or after that date receive the New State Pension, a single-tier amount intended to be simpler than the previous system. Under the new rules most people need at least ten qualifying years on their National Insurance record to receive any State Pension and 35 qualifying years to receive the full new State Pension, although transitional rules and past periods of contracting out mean that many individuals get more or less than the headline rate.
The weekly amount of State Pension is normally increased each April for pensioners living in the UK and in certain other countries. Under the government's "triple lock" commitment, the basic and new State Pension are uprated by the highest of earnings growth, price inflation or 2.5 per cent. State pension age, which for many years was 60 for women and 65 for men, is now 66 for both and is legislated to rise to 67 between 2026 and 2028 and to 68 between 2044 and 2046, subject to periodic review.
Background
Old State Pension
The Old State Pension, consisting of the Basic State Pension, is a benefit payable to men born before 6 April 1951, and to women born before 6 April 1953. The maximum amount payable for the Basic State Pension component is £176.45 a week.Additional State Pension is an earnings related element that sits on top of the basic pension. It has been delivered through several schemes, notably the State Earnings Related Pension Scheme from 1978 and the State Second Pension from 2002, together with a short-lived State Pension top up scheme. Entitlement depends on the level of earnings on which National Insurance contributions were paid and the number of years over which contributions were made. Employers and pension scheme members could in some circumstances “contract out” of Additional State Pension, paying a lower rate of National Insurance in exchange for building up benefits in a workplace or personal pension instead.
Some spouses, civil partners, widows and widowers are able to receive a pension based wholly or partly on the contribution record of a husband, wife or civil partner rather than their own record, and people aged 80 or over with low or no contributory entitlement may qualify for a non-contributory Category D pension. These patterns are gradually being phased out for people who fall entirely under the new State Pension, but they continue to apply to many people whose entitlement is calculated under the pre-2016 rules.
New State Pension
The new State Pension applies to men born on or after 6 April 1951 and women born on or after 6 April 1953 who reach State Pension age on or after 6 April 2016. It replaces the combination of basic and Additional State Pension for future retirees with a single weekly amount. The full rate of new State Pension in 2025–26 is £230.25 a week for people with a complete contribution record, although many individuals receive more or less than this depending on their past position in the old system and on any periods of contracting out.For people who already had National Insurance contributions before April 2016, the Department for Work and Pensions calculates a “starting amount” under both the old rules and the new rules and uses whichever is higher, subject to adjustments for any contracted-out service. Where someone would have been entitled to more under the old basic plus Additional State Pension system than under the full new State Pension, the excess is paid as a “protected payment” on top of the standard amount. People whose contributions were reduced because they were contracted out may receive a lower State Pension than the full rate under the new scheme, but should have offsetting rights in a workplace or personal pension that reflect the National Insurance rebate paid in the past.
Contribution record
The State Pension is a 'contribution-based' welfare benefit, and depends on an individual's National Insurance contribution history. To qualify for a full pension, an individual would require:- Basic State Pension: 30 qualifying years for contributors claiming between 6 April 2010 and 5 April 2016;
- New State Pension: 35 qualifying years for contributors claiming from 6 April 2016.
Pre-1975 system
Before the National Insurance system changed in 1975, the contribution rules were somewhat different. To receive the benefit, a person needed to have a minimum of 3 qualifying years of flat-rate contributions, and have maintained a yearly average of 50.Pension uprating
The benefits paid under basic State Pension are increased in April each year to pensioners living in the UK and in certain overseas countries which have a social security agreement with the UK that includes British pension uprating, in line with the CPI. All state pensions for these pensions are protected by the "triple lock" guarantee. This was a Liberal Democrat manifesto policy that was then adopted by the 2010–2015 coalition government, meaning that the benefit rises each year by either the annual price inflation, or average earnings growth, or a guaranteed 2.5% minimum, whichever is the greatest.Coming into effect each April, the uprating is based on the previous September's CPI inflation, along with the annual increase in weekly earnings averaged over May to July. The triple lock was replaced for one year for the 2022 increase with a double lock with the average earnings element removed. This was because the government believed there was a statistical anomaly due to Covid having depressed the 2020 earnings figures.
In November 2023, The Trussell Trust calculated that a single adult in the UK in 2023 needs to earn at least £29,500 a year to have an acceptable standard of living, up from £25,000 in 2022.
Pensioners living in other countries without a current agreement have their pensions frozen at the rate in effect on the date when they left the UK, or on the date when they applied for a pension, whichever is later.
State Pension age
One of the conditions of entitlement to the State Pension is that a person has reached State Pension age. From the 1940s until April 2010 the State Pension age in the United Kingdom was 60 for women and 65 for men. Legislation since the mid 1990s has equalised the State Pension age for men and women and set a timetable for future increases, in part to reflect rising life expectancy and concerns about the long term affordability of the system. As of October 2020 the State Pension age for both men and women is 66. Under current legislation it is due to rise to 67 between 2026 and 2028 and to 68 between 2044 and 2046.Before the Pensions Act 1995, the state pension age had been 60 for women, and 65 for men. The Act changed this so that the women's pension age would be made equal with men, but that the transition should only be phased in from 2010 to 2020. In 2006, a cross party Parliamentary report again recommended equalisation of ages on the basis of equal treatment of both sexes. It also recommended a rise in the state pension age for both men and women to 68 between 2024 and 2046. The rationale for the age rise was that people would be living longer in the future. This was put into effect by the Pensions Act 2007.
The Pensions Act 2011 then accelerated these changes, bringing forward the date by which women’s State Pension age reached 65 to November 2018 and raising the State Pension age for both men and women to 66 by October 2020. The Pensions Act 2014 brought forward the increase in State Pension age to 67 so that it will now occur between 2026 and 2028.
The government introduced a system of periodic reviews of State Pension age. The first review, reported in 2017, was informed by an independent report by John Cridland and analysis by the Government Actuary’s Department. It recommended bringing forward the rise in State Pension age from 67 to 68 to between 2037 and 2039, with an aim that people should spend up to one third of their adult life receiving the State Pension. The government said it accepted the principle of a rise to 68 on this timetable, but would legislate only after a further review. A second review, concluded in March 2023, considered new projections for life expectancy and an independent report led by Baroness Neville-Rolfe. It endorsed the existing timetable for the increase to 67 between 2026 and 2028 but did not bring forward the planned rise to 68. Instead, the government confirmed that the current legislation, which provides for the State Pension age to rise to 68 between 2044 and 2046, would remain in place pending a further review in the next Parliament.
Controversies and legal challenges
The increases in women’s State Pension age, and the way they were communicated, have been the subject of sustained political and legal debate. Campaign groups, including Women Against State Pension Inequality and BackTo60, argue that some women born in the 1950s experienced a significant and unexpected increase in their State Pension age, which disrupted their retirement plans and caused financial hardship. Supporters of the policy point to the need to equalise State Pension ages for men and women and to respond to longer life expectancy and population ageing.In May 2019, a challenge in the High Court failed to reverse decisions to accelerate the equalisation of the pension ages on the ground that not enough notice was given. The Conservative Party in its 2019 manifesto stated that it would not change the rules, while the Labour Party committed itself to compensating women who were unfairly affected by the changes in the pension age. An appeal to the Court of Appeal against the decision of the High Court was dismissed on 15 September 2020. On 31 March 2021 the Supreme Court refused the women's application for permission to appeal against the decision of the Court of Appeal.
On 21 March 2024, the Parliamentary Ombudsman recommended that the affected women receive compensation in the range of £1,000 to £2,950 each. In December 2024 the government accepted the finding of maladministration and apologised for the delay in direct mailing but rejected the Ombudsman’s approach to injustice and remedy and announced that it would not introduce a compensation scheme.