State Pension key facts people need to know before or after reaching retirement age

The latest statistics from the Department for Work and Pensions (DWP) show the State Pension currently provides regular financial support for 12.7 million older people across the country, including over one million retirees living in Scotland. This payment is available for those who have reached the UK Government’s eligible retirement age, which is currently 66 for both men and women, and have paid at least 10 years' worth of National Insurance Contributions.

However, many people approaching the official retirement age this year may not be aware of key facts about the State Pension, the biggest of which is that this contributory benefit is not paid automatically by the DWP and needs to be claimed - or they could miss out on payments of up to £221.20 each week.

The money is not paid automatically when someone reaches State Pension age as some people choose to defer making a claim in order to keep working and generate more towards their pension pot, especially if they have not paid the full quota of 35 years' worth of National Insurance Contributions, or were 'contracted out'.

DWP guidance explains: “You do not get your State Pension automatically - you have to claim it. You should get a letter no later than two months before you reach State Pension age, telling you what to do.”

It then clarifies you can either claim your State Pension or delay (defer) claiming it. It states: “If you want to defer, you do not have to do anything. Your pension will automatically be deferred until you claim it.”

Which means, unless you respond to the letter confirming you want to start claiming State Pension, you will not receive any payments as the DWP will interpret no response as a wish to defer.

Deferring your State Pension could increase the payments you get each week when you decide to claim it, as long as you defer for at least nine weeks. Your State Pension increases by the equivalent of 1% for every nine weeks you defer, this works out as just under 5.8% for every 52 weeks.

The extra amount is paid with your regular State Pension payment, however, it’s important to be aware any extra payments you get from deferring could be taxed - find out more on GOV.UK here.

it's also important to be aware deferred State Pensions increase each year in line with the September Consumer Price Index (CPI) inflation rate and the highest measure of the Triple Lock policy.

New State Pension payment rates 2024/25

  • Full payment rate: £221.20

  • Every four-week pay period: £884.80

Basic State Pension payment rates 2024/25

  • Category A or B Basic State Pension (full rate): £169.50

  • Every four-week pay period: £678.00

Your first payment

Your first payment will be within five weeks of reaching State Pension age and you will get a full payment every four weeks after that. You might get part of a payment before your first full payment. The letter will tell you what to expect.

You can also choose to receive your State Pension payments weekly or fortnightly which will result in a shorter delay for the first payment - find out more here.

Your State Pension payment day

The day your State Pension is paid depends on your National Insurance number.

Last two digits of your National Insurance number:

  • 00 to 19 - paid on a Monday

  • 20 to 39 - paid on a Tuesday

  • 40 to 59 - paid on a Wednesday

  • 60 to 79 - paid on a Thursday

  • 80 to 99 - paid on a Friday

An older man and woman are studying paperwork with a worried look on their faces
The full New State Pension is worth £221 each week during the 2024/25 financial year. -Credit:Getty

DWP ‘starting amount’ for the new State Pension

If you have qualifying years on your National Insurance record as at April 5, 2016, DWP works out a ‘starting amount’ for you for the new State Pension.

It is the higher of either:

  • the amount you would have got under the previous State Pension system up to 6 April 2016, or

  • the amount you would get on your record to 6 April 2016 if the new State Pension had been in place at the start of your working life

Both amounts reflect any periods when you were contracted out of the Additional State Pension. Your ‘starting amount’ could be less than, more than or equal to the full new State Pension.

If your ‘starting amount’ is less than the full amount of the new State Pension

  • Each ‘qualifying year’ you add to your National Insurance record after April 5, 2016 will add a certain amount (about £5.82 a week, this is £203.85 divided by 35) to your ‘starting amount’, until you reach the full amount of the new State Pension or you reach State Pension age, whichever happens first.

If your ‘starting amount’ is more than the full amount of the new State Pension

  • You will get this higher amount when you reach State Pension age. It is possible to have a starting amount higher than the full new State Pension if you have some Additional State Pension. The difference between the full new State Pension and your ‘starting amount’ is called your ‘protected payment’.

If your ‘starting amount’ is equal to the full new State Pension

  • You will get the full new State Pension when you reach State Pension age.

How can I find out how much State Pension I could get?

You can get a State Pension forecast online from the Check your State Pension service here. This provides personalised information, including your State Pension age, an estimate of how much State Pension you may get at that point and if you can increase this amount. It also allows you to view your National Insurance contribution history.

More information about deferring your State Pension can be found on the GOV.UK website here.

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