Q&A: Basic state pension

The state pension increases in line with prices

As part of its understanding pensions series, the BBC News website provides an introduction to the basic state pension.

What is the basic state pension?

The basic state pension is paid to women at 60 and men at 65, who fulfil National Insurance (NI) contribution requirements.

From 6 April 2020, the state pension age for both men and women will be 65.

The government will introduce the change gradually from age 60 to 65 for women over a 10-year period from 2010 to 2020

How much is it worth?

The full weekly rates are (year to April 2010):

• Single person: £95.25
• Couple: £152.30

Will I get the full basic state pension?

Not necessarily.

What you get will depend on your National Insurance (NI) contributions - and the rules are stringent.

Your pension depends on how long you have worked for and the number of "qualifying years" you have.

A woman with a working life of 44 years will need 39 qualifying years for a full pension and a man with a working life of 49 years will need 44 qualifying years.

However, if you reach state pension age on or after 6 April 2010, you will need 30 qualifying years for a full basic State Pension.

The contribution record of people who have been unable to work due to unemployment, sickness or caring responsibilities, may be protected by credits or "home responsibilities protection".

If you reach state pension age on or after 6 April 2010, home responsibilities protection is being replaced with National Insurance credits. Years of home responsibilities protection built up before 6 April 2010 will count as qualifying years of National Insurance credits.

What happens if I have not made enough contributions?

If you have not paid sufficient contributions you may get a partial pension or you may not receive a pension at all.

If you are not entitled to a full Basic Pension you may receive a reduced amount.

But if you retire with less than 25% of the qualifying years for a full pension, you won't get anything at all.

People aged 80 and over receive a non-contributory pension, at 60% of the basic state pension as long as they fulfil other requirements, such as residency rules.

What about the earnings link?

A link between state pensions and earnings was introduced by Barbara Castle in 1974.

This ensured that state pensions kept up with the rate at which salaries were rising.

However, it was scrapped six years later by Margaret Thatcher, and more pensioners must now rely on private savings to make up the difference.

Restoring the link with earnings would cost an estimated £0.5bn in the first year, rising to £10bn by 2010, according to government figures.

Isn't the state pension age changing for women?

Legislation to equalise the pension age at 65 for both men and women has been passed.

The change will be phased in between 2010 and 2020 and will not affect anyone born before 6 April 1950.

If you are a woman and born between 6 April 1950 and 5 April 1955, your state pension age will fall somewhere between 60 and 65.

Longer term further rises are planned for both men and women, eventually taking the pension age to 68 by 2044.