Understanding Your State Pension

The State Pension forms a key part of your retirement planning. It provides a regular, guaranteed payment from the government once you reach State Pension age. Understanding how it works can help you plan more confidently for the future.

Who can receive the State Pension?

The State Pension is available to anyone who has built up sufficient National Insurance credits over their working life. The State Pension age is currently 66, increasing to 67 from April 2028, and it will rise again to 68 for those born after April 1977.

Building your entitlement

You earn National Insurance credits by working and paying National Insurance contributions. In the past, this was often referred to as having a “stamp.”You can also receive National Insurance credits automatically in certain situations, for example:

• If you claim Child Benefit for a child under 12.

• If you’re unable to work due to illness or disability.

• If you’re a carer for someone who is ill or disabled.

The full list of qualifying situations can be found on the government website here.

How much will you receive?

To qualify for the State Pension, you must have at least 10 qualifying years of NI contributions or credits. To receive the full amount, you’ll need 35 qualifying years.

For the 2025/26 tax year, the full New State Pension pays £230.25 per week, which is £11,973 per year. If you have fewer than 35 qualifying years, your pension will be proportionately reduced.

For those who started receiving their state pension before April 2016, you’ll be receiving the previous version of the state pension called the Basic State Pension. The amount you receive may differ to the figure above, as this version of the State Pension includes various top-up options and entitlements that don’t apply under the new system.

Checking your record

You can check your State Pension forecast and National Insurance record online through the government gateway website.

• To see your State Pension projection, click here.

• To view a breakdown of your National Insurance record, click here.

These tools show whether you have any gaps in your record and, if so, the cost of filling them.

When 35 years isn’t enough

We’ve seen cases where clients have more than 35 years of National Insurance contributions but don’t receive the full State Pension. This is often due to a historic arrangement called “contracting out.” While National Insurance contributions were paid as part of this, they didn’t always count fully towards your State Pension record.

If you find yourself in this position, we recommend phoning HMRC to ask for an explanation of your record and how contracting out may have affected your entitlement. They can clarify your situation and confirm whether making voluntary contributions would increase your pension.

Filling gaps in your record

If you have missing years, it’s often possible to make voluntary contributions to fill the gaps. Currently, you can go back up to six years to make up for any missing years. Doing so can be a cost-effective way to boost your future State Pension, but it’s important to check first whether topping up will actually increase your entitlement.

In some cases, making up one missing year can increase your pension by hundreds of pounds per year for life, an excellent long-term return, but this isn’t always the case, especially if you already have the maximum number of years.

Why it matters

While the State Pension alone may not cover your full retirement needs, it provides a valuable foundation for your income in later life. Knowing exactly what you’ll receive allows you to plan how much you may need to supplement it with savings, pensions, or investments in the future.

We recommend that anyone nearing retirement age reviews their State Pension entitlement to ensure it aligns with their financial plans. If you have any questions or would like help understanding your record or whether you should make voluntary contributions, please don’t hesitate to get in touch.