How the State Pension Works: Qualifying Years, and Key Features

The State Pension system in English law has undergone significant reforms in recent years. The current system, introduced on 6 April 2016, replaced the previous complex arrangement with a simplified “new State Pension“

Under the new system, individuals born on or after 6 April 1951 (men) or 6 April 1953 (women) are eligible for the new State Pension. To qualify for the full amount, currently £221.20 per week (2024-2025), individuals need 35 qualifying years of National Insurance contributions.

Key features of the new system include:

• A single-tier pension, replacing the basic and additional state pensions
• A minimum of 10 qualifying years to receive any State Pension
• The ability to build qualifying years through employment, self-employment, or National Insurance credits
• Provisions for inheritance of pension rights between spouses or civil partners

The State Pension age is currently 66 for both men and women, with planned increases in the future.

Individuals must claim their State Pension, as it is not paid automatically. The government provides tools and resources to help people understand their entitlements and plan for retirement.

State Pensions are an often-overlooked resource when dealing with pensions, and this is a mistake as a full State Pension could be as worth as much as £250,000 – £300,000 were it a more ‘typical’ private pension. Some elements of some of the State Pensions may be the subject of a pension-sharing order, but all pensions should be considered as relevant assets.

Pensions are a complicated area of law and require specialist consideration – something Warners have considerable experience in.