PENSIONS

State Pension

What you need to know about pensions

State Pension

(Please note: This is for information only and does not constitute advice. This is a potentially complex area, and for further details or to request a State Pension statement, please visit the government website at https://www.gov.uk/browse/working/state-pension)

Understanding the State Pension

The State Pension is a regular income paid by the UK government once you reach State Pension age. Your entitlement is based on your National Insurance (NI) record and the number of qualifying years you have built up through work, self-employment, or credited contributions.

It is intended to provide a foundation for retirement income, rather than to support most lifestyles on its own fully. For this reason, it is often combined with workplace or personal pensions.

State Pension Age

The State Pension age (SPA) is currently 66 for both men and women.

Under existing legislation, the SPA is scheduled to rise to 67 between 2026 and 2028. By law, the government must review State Pension age at least every five years, taking factors such as life expectancy into account. While discussions have been held to increase the SPA to 68, any further changes would require new legislation to be approved by Parliament.

How to claim the State Pension

The State Pension is not paid automatically. You must actively claim it.

You should receive a notification from the Department for Work and Pensions several months before reaching State Pension age, inviting you to apply. Claims can be made online, by telephone, or by completing and returning a paper application form. Separate arrangements apply in Northern Ireland.

How and when payments are made

State Pension payments are usually made every four weeks in arrears. The money is paid directly into your chosen bank or building society account.

Working after State Pension age

You can continue working and earning income while receiving your State Pension. Your employment status does not affect your entitlement, and you are not required to stop work in order to claim.

Is the State Pension taxable?

Yes. The State Pension counts as taxable income.

It is paid without tax being deducted at source, but it is included in your total income for the tax year. If you have other income, such as earnings or private pension income, HMRC will usually adjust your tax code so that any tax due on your State Pension is collected through those sources.

Deferring your State Pension

You do not have to claim your State Pension as soon as you reach State Pension age. You may choose to defer it, which can increase the amount you eventually receive.

For people reaching State Pension age under current rules, the weekly pension increases by approximately 1% for every nine weeks of deferral. The longer you delay claiming, the higher your eventual weekly payment will be.

Claiming the State Pension while living abroad

You can claim your State Pension if you live overseas. However, whether your pension increases each year depends on where you live.

Your State Pension will continue to be uprated annually if you reside in the European Economic Area, Switzerland, or a country that has a reciprocal social security agreement with the UK. If you live elsewhere, your pension is usually frozen at the rate it was when you first claimed it.

What happens on death?

Rules around inheritance of the State Pension depend on which system applies to you and your individual circumstances. In some cases, a surviving spouse or civil partner may be able to increase their own State Pension using the deceased person’s National Insurance record.

There are currently two State Pension systems in operation, depending on when you reached State Pension age.