If you have been making National Insurance contributions through your working life, you may be entitled to the State Pension

Most people will be entitled to a State Pension when they come to retire. Your State Pension is an amount of money paid to you by the Government when you reach your State Pension age (SPA), and the amount you will receive is based upon your National Insurance contributions.

Your State Pension is an important factor when it comes to planning your retirement, although it should not be solely relied on as your only source of income when you come to retire, as it is unlikely that it will fund your retirement goals without additional income as well.

The SPA is the earliest you can draw your state pension. The current full State Pension rate is £179.60 per week as of the 2020/21 tax year.

The date you reach SPA depends on when you were born. Under current rules:

  • Men born before 6 December 1953 retain their SPA of 65;
  • Women born before 6 April 1950 retain their SPA of 60;
  • Women born on or after 6 April 1950 but before 6 December 1953 will have an SPA between 60 and 65;
  • Men and women born on or after 6 December 1953 but before 6 October 1954 will have an SPA between 65 and 66;
  • Men and women born on or after 6 October 1954 but before 6 April 1960 will have an SPA of 66;
  • Increases from 66 to 67 and then to 68 will affect men and women born on or after 6 April 1960

The Government is planning further increases, which will raise the State Pension age from 66 to 67 between 2026 and 2028.

The State Pension age is going to be kept under review, which means that it could change again in the future, depending on different factors, such as changes in life expectancy.

When you reach your SPA, you are given the option to either start receiving your income from the Government or you can defer the payments if you wish, and can afford, to do so. If you do decide to defer your payments, then the amount you receive will increase.