The Basic State Pension
The Basic State Pension
The Basic State Pension is paid to employed, self-employed and other individuals who have been credited with National Insurance contributions. It is not a means tested benefit, and it is payable from state pension age which is currently 65 but soon to rise to 66.
Basic State Pension Payments
The basic pension is a state benefit that is designed to provide an income for its workers in their old age. Payments are typically made very four weeks, directly into a bank account. The rates for 2014/15 are:
- Single person’s rate is £113.10
- Full couple’s rate is £180. This covers a couple where one partner’s entitlement is based on their spouse or civil partner’s NIC record.
Qualifying for the Basic State Pension
The Basic Pension is also known as a Category A pension and you will qualify for a full pension if you have at least 30 qualifying years – a ‘qualifying year’ is a tax year in which you have paid 52 weeks of full Class 1 NICs (for employed people) or Class 2 NICs (for self employed people).
Qualifying Years from April 2016
These are the current requirements but they will change from April 2016 when you will require 35 qualifying years.
If you are not working, you can still accrue NICs by paying Class 3 NICs or having Class 1 NICs credited to you. See below.
Basic State Pension Credits
You may be able to receive credits towards the Basic State Pension if you are:
- receiving, or eligible to receive, Child Benefit for a child under the age of 12
- claiming Jobseekers Allowance
- claiming Employment and Support Allowance, Unemployability Supplement or Allowance or Statutory Sick Pay
- receiving Universal Credit or Working Tax Credits
- receiving Carer’s Allowance
- receiving Statutory Maternity, Paternity or Adoption Pay
- the spouse or civil partner of a member of the armed forces where they accompany them on an overseas posting
- a registered foster carer
- over the age of 18 and on an approved private training course which must last less than a year
- on a Government sponsored training course
- on jury service
- serving a prison sentence and the conviction is subsequently quashed
Topping-Up Your National Insurance Contributions
You can make additional voluntary contributions in order to ‘top-up’ your National Insurance contributions and improve your eligibility to receive the full Basic State Pension.
Class 3 National Insurance Contributions
Class 3 National Insurance Contributions can be paid if you have an inadequate NIC record. The purpose of this type of NIC is that they enable you to increase your entitlement to the Basic State Pension. However, there are some limitations:
- You must pay the additional contributions within six years of the tax year in which the contribution shortfall occurred. Payment can be made after you haves reached State Pension age.
- The weekly rate you can pay for the 2014/15 financial year is £13.90. However, if you make a payment more than two years after the year concerned, the rate will usually go up.
Other basic State benefits
There are other State benefits that that you will be eligible for if you have reached State Pension Age:
- Christmas bonus of £10 which is not indexed-linked
- Increase of 25p a week to your pension from the age 80 which is not indexed-linked
- Winter Fuel Payments of between £100 and £300 depending on your age