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How much State Pension will I receive?

Knowing how much you can expect from the State Pension is an important part of being able to plan for retirement

For many people, the State Pension is the main source of income in retirement, while for others it can mean the difference between relative poverty and leading a comfortable lifestyle. Knowing how much you can expect from the State Pension is an important part of being able to plan for retirement. 

The State Pension 

 Do you know how much State Pension you’ll receive when you retire?The full Basic State Pension will be £119.30 per week from April 2016, or around £6,200 a year. The amount you will be entitled to depends on various factors, including your National Insurance Contributions (NICs).

To be eligible for the full amount, you need to have 30 years or more of NICs. Some benefits, such as unemployment, sickness or parental carer benefits, also count towards your State Pension entitlement.  

There are also various pension credits available for pensioners whose State Pension falls below this level – for information on whether you may be eligible and how much you may be able to claim, see the Government’s online Pension Credit Calculator.

The New State Pension

If you’re due to reach the State Pension Age on or after 6 April 2016, you will be eligible for the New State Pension, which will pay at least £155.65 a week – over £8,000 a year – if you have 35 years’ NICs or equivalent credits.

For the 2.5 million or so people due to reach State Pension Age by 2020, the Government is rolling out a service to give personalised estimates of how much they can expect. These will be based on their work history and NICs. The service will eventually be extended to everyone.

But despite being billed as a ‘flat rate’, many people retiring in the early years of the new system will not get the full £155.65 a week. The Government’s own figures show that less than half (45%) of those reaching State Pension Age between 2016 and 2020 will be eligible for the full amount, and it admits that it should have explained better how the new system works. 

Pensions Minister Baroness Altmann, said: “Huge efforts have been put into reforming the mind-blowingly complicated State Pension system that exists today into something that, over time, will be clearer and fairer for everybody. But the job of explaining to people how the reforms will affect them hasn’t been done well enough.” 

How much New State Pension?

The Government will work out what how much State Pension you would have built up under both systems – that is, as if the New State Pension rules were in place since you started work as well as what you have already built up – and you will get the higher of the two amounts.

Calculations by retiresavvy show that someone who has worked for 25 years might have built up a Basic State Pension entitlement in the region of £99.50, which could be worth around £111.20 under the New State Pension. 

This would make them around £11.70 a week better off – or over £600 a year – under the New State Pension, without taking into account any extra entitlement they may have built up in the Additional State Pension. 

The State Pension Age is rising 

As people are living longer – today’s average 65-year-old can expect to live for another 18-20 years, according to the Office for National Statistics – the State Pension Age has to rise to keep pace with these increases.

At present, the State Pension Age is 65 for men. For women, it will reach 65 by November 2018 and will then rise to 67 for both men and women by October 2028, before rising further in future years. 

The Government has said it will review the state pension age at least every five years from 2017, based around the idea that people should be able to spend a certain proportion – up to a third of their adult life – in retirement. Revisions to the State Pension age will be based on life expectancy and other factors.

The Government has a State Pension Age calculator that you can use to work out your State Pension Age.

The Future Pension Centre can give you a State Pension statement showing how much you are likely to get. Visit for more details.

What are your plans for retirement? Let us know below, have your say in the Forum, or head back to ‘Pensions explained

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This article has been commissioned by retiresavvy and any opinions voiced are the author's own. This article was revised in January 2016 to bring it up to date with the most recent changes to the state pension system. 

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