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Understanding the UK State Pension: eligibility, rules and maximising your income

The State Pension is a regular payment made to you by the government when you reach retirement age. But under the rules of the new State Pension, what you get will depend on how much National Insurance (NI) you’ve paid. So, if you’ve had a career break, you might not get as much as you thought. 

Updated: 25.06.26

By Neil Marsden

This content was factually correct when written but may not reflect current developments or information.

Understanding the state pension

For a clearer idea of what you can expect from your State Pension, we look at how it currently works, how to claim it, and what the tax implications are. We also identify common shortfalls so you can plan and prepare for the future.  

What is the State Pension and when can you claim it? 

The State Pension is a government-funded payment that you receive when you reach State Pension age. To qualify for the minimum amount, you’ll need to have at least ten qualifying years on your National Insurance record. It can be claimed by: 

  • Men born on or after 6 April 1951. 

  • Women born on or after 6 April 1953. 

 Anyone born before these dates will receive the basic State Pension instead. 

What is the State Pension age? 

Currently, State Pension age is 66, but this is scheduled to rise to 67 by March 2028 (you can also check your State Pension age at GOV.UK).  

To make the transition run smoothly, anyone born between 6 April 1960 and 5 March 1961 will be able to claim their State Pension between the ages of 66 years and 1 month and 66 years and 11 months – depending on when your birthday falls: 

Date of birth

Age you can claim State Pension

6 April 1960 – 5 May 1960

66 years and 1 month

6 May 1960 – 5 June 1960

66 years and 2 months

6 June 1960 – 5 July 1960

66 years and 3 months

6 July 1960 – 5 August 1960

66 years and 4 months

6 August 1960 – 5 September 1960

66 years and 5 months

6 September 1960 – 5 October 1960

66 years and 6 months

6 October 1960 – 5 November 1960

66 years and 7 months

6 November 1960 – 5 December 1960

66 years and 8 months

6 December 1960 – 5 January 1961

66 years and 9 months

6 January 1961 – 5 February 1961

66 years and 10 months

6 February 1961 – 5 March 1961

66 years and 11 months

6 March 1961 – 5 April 1977

67

There is a further increase planned between 2044 and 2046, when the State Pension age is likely to rise to 68.  

How much is the UK State Pension? 

The maximum amount you can claim in 2026/27 is £241.30 per week. To receive this full amount, you’ll need to have paid National Insurance for 35 qualifying years (a qualifying year is any tax year during your working life where you’ve paid enough NI).  

Your NI contributions include: 

  • Regular NI payments made while working. 

  • NI credits you received because you were unemployed, ill, or a parent or carer.  

You may also be eligible for the State Pension if you worked abroad or are a married woman and paid the reduced rate of NI.   

What was the old State Pension system? 

The current (new) State Pension scheme started on 6 April 2016. Before that, the scheme was made up of two payments: 

This older scheme only applies to men born before 6 April 1951 and women born before 6 April 1953.  

Is the State Pension taxable? 

The State Pension is taxable, but whether you do or don’t pay tax on it depends on your total income (including private pension funds, other investments, or employment).  

When you receive your State Pension, you’ll be paid the gross amount (in other words, it will not be taxed at the point you receive it). This is to ensure you pay the correct amount of tax when all your other income is taken into account.  

If you have no other income and only receive the State Pension, it’s unlikely you’ll need to pay tax as the amount will not exceed your personal allowance (currently £12,570).  

However, because personal tax allowances have stayed the same since 2021/2022, but pension payments have increased thanks to the triple lock system, it’s possible to exceed your £12,570 allowance. If this is the case and your total income exceeds your personal allowance, you can expect to be taxed.   

There are a few ways that tax might be collected on your state pension, depending on your circumstances: 

  • under the PAYE system, if you have a source of PAYE income (for example, a private pension or employment) 

  • under the self-assessment system (if you complete a tax return) 

  • by HMRC issuing a simple assessment calculation after the tax year end 

What is the pensions triple lock? 

The triple lock ensures that the State Pension increases every April. The increase will depend on whichever of these three is the highest: 

  • Inflation (based on the consumer price index). 

  • The average wage increase between May and July of the previous year.  

  • 2.5%. 

Can you claim the State Pension and continue to work? 

Yes. Reaching State Pension age does not mean you have to stop working; you can continue working while claiming (there are no limits on the hours you can work). 

If you do continue to work while claiming the State Pension, you won’t usually need to make any further NI contributions (but your employer might).  

Remember, though – income from a job (even a part-time one) could push you over your tax-free allowance. This means you’ll be taxed on the amount that exceeds the £12,570 threshold. If you continue to work full-time, your combined income could also mean you end up in the higher tax bracket.

Three ways to maximise your State Pension 

To help ensure you get the most out of your State Pension, consider: 

 

  1. Checking your National Insurance record  

You can check your NI record online at GOV.UK. From here, you’ll be able to see if there are any gaps in your NI contributions, as well as what you’ve paid so far, and a forecast of your entitlement.  

 

  1. Make voluntary NI contributions 

If you do have gaps in your NI record, you can make voluntary contributions to help increase what you get when you reach State Pension age. Be aware that you can only make contributions for the past six years (the deadline is 5 April each year).   

 

  1. Defer your pension  

If you don’t need to claim your pension when you hit State Pension age, you can choose to defer it. If you decide to do this, you can claim the payments you’ve deferred as: 

A single one-off payment 

You can only apply for a one-off payment once, and the amount you can claim is limited to 52 weeks’ worth of State Pension (no interest is added to this payment).  

If you choose to defer your State Pension for more than 12 months, you’ll get the rest as extra State Pension.  

Increased regular payments (called ‘extra’ State Pension) 

You have to defer your State Pension for at least nine weeks before you can claim increased regular payments. After this time, you can get the amount you’ve deferred added to your regular State Pension payments.  

For every nine weeks you defer, you’ll get an extra 1% added to your regular weekly payment (which works out at roughly 5.8% for every 52 weeks you defer). Based on the maximum State Pension in 2026/27, you’ll get an extra £13.99 per week if you decide to defer for a year.  

A combination of a one-off payment and higher regular payments 

If you defer for more than a year, you can claim the deferred payment as a one-off lump sum and as increased regular payments. For example, you can claim for up to 52 weeks as a lump sum, and the remainder as increased regular payments.  

Why the State Pension may not be enough for retirement 

Independent research has helped develop guidance known as the Retirement Living Standards, which shows what sort of retirement you can expect to have based on what you spend: 

  • Minimum standard – covers your basic needs. 

  • Moderate standard – you have financial security and some flexibility. 

  • Comfortable – you have more financial freedom and can afford luxuries.  

The guidance assumes that you own your own home and have no mortgage to pay. You can find a full explanation and details of what you can expect at the Retirement Living Standards website. Please note, the examples below are for the 2025/26 tax year. 

For most people living in a two-person household (which is the majority of State Pension age adults), the joint State Pension income is just enough to meet the ‘minimum’ standard of living in retirement. Based on the Retirement Living Standards, this assumes you’ll need around £21,600 per year to cover all your needs with a modest amount for leisure activities (but no car or holidays abroad).  

For a moderate lifestyle, you’d need roughly £43,900. This would allow you to keep a small car and replace it every seven years. You’d also be able to go abroad once a year and have one long weekend away in the UK with some spending money.  

In contrast, living a ‘comfortable’ lifestyle could cost around £60,600 per year for a two-person household. This would enable you to keep a car, replace it every five years, travel abroad, and take weekend breaks (with spending money). You’d also be able to spend more freely on food, eating out, and gifting.  

Although everyone’s circumstances are different, these scenarios highlight that while it is feasible for two people to live on their State Pension income, those payments cover only the bare minimum, leaving little left over. 

To enjoy a more moderate or comfortable lifestyle, you may need to combine your State Pension payments with income from a workplace or personal pension and other savings and investments. With this in mind, it’s never too early to start taking personal pensions advice to help ensure your money’s working hard to give you the retirement you want.  

The value of investments and any income from them can go down as well as up and you might not get back the original amount invested. The past is not a guide to the future. The value of tax benefits depends on your individual circumstances. Tax laws can change.

Retirement planning now for your future

Stopping work might be the last thing on your mind, but thinking ahead can help provide you with a more rewarding retirement. That said, planning for the future can feel overwhelming (and confusing).  

At Alan Boswell Group, we’re experts in retirement planning with over four decades of experience. Our financial advisers are here to help with more than just investment advice; we can support you with all your financial affairs, including wealth management and estate planning. 

For more information or to speak to an experienced financial adviser.

Speak to us:  01603 967967

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