National Insurance must-knows to ensure you get full New State Pension payments in retirement
Income tax rises for Scots in April - how the changes affect you
New research from Standard Life's Retirement Voice report suggests there is a widespread lack of awareness around the State Pension, with many adults unsure of how much they will be paid and when they will start receiving it.
The full New State Pension is worth almost £12,000 a year, however, half of UK adults (50%) are unaware of how much they will receive from their State Pension in later life, including 31 per cent of those nearing retirement, aged 55-64. Meanwhile, nearly a third of UK adults (32%) and 12 per cent of 55 to 64-year-olds don't understand what the State Pension age means to them, or their future.
Standard Life's research, conducted among 6,000 UK adults, found a substantial lack of understanding regarding other areas of the State Pension, including a lack of awareness that National Insurance Contributions determine the amount of State Pension someone receives in retirement.
Over half of those surveyed admitted they had no idea of the current value of State Pension payments (51%) and were also unaware of how to calculate their State Pension entitlement (52%).
Meanwhile, over a third (34%) revealed they didn't know that their National Insurance contributions determine the level of entitlement and the amount of money they'll receive from the State in retirement.
Commenting on the findings, Dean Butler, Managing Director for Retail Direct at Standard Life, part of Phoenix Group, said: 'With the State Pension rising to £11,973 a year for the 2025/26 tax year, it remains a crucial part of many people's retirement income. But despite its importance, there's still a lot of confusion around how it works and how much people might get.
'Knowing when you'll start receiving your State Pension and how much you're likely to get is an important part of planning for retirement. It helps you work out how much extra you need to save, when you could afford to retire, and what your overall financial picture will look like.'
He added that understanding how your National Insurance contributions impact your retirement is vital, so you're not caught out when the time comes.
Mr Butler continued: 'With the Personal Allowance frozen at £12,570 until 2028, there's a good chance that people will pay tax on the State Pension alone from 2026 or 2027. The UK Government might change the rules to avoid this, but it's good to be aware of tax when planning for retirement.'
Mr Butler answers key questions about the State Pension to help more people understand the retirement income.
What is the State Pension?
The State Pension is a regular payment made to you by the UK Government every four weeks when you reach State Pension age, which is currently 66. However, it's important to be aware that payments, which are issued by the DWP, can be made every week or every fortnight.
Not everyone is entitled to the full State Pension, and the amount you receive might not be enough for you to live on. Therefore, it's important to factor your State Pension into your retirement planning and ensure you have a good idea of how much it might be worth, when you can claim it and how it will stack up with your other retirement savings.
The easiest way to check how much you will be due is to use the State Pension forecasting tool on GOV.UK here.
How much is the State Pension worth?
The full New State Pension is currently worth £230.25 per week, however, the amount you get is dependent on how many 'qualifying' years of National Insurance payments you have. You'll usually need at least 10 qualifying years on your National Insurance record to get any State Pension and you'll need around 35 qualifying years to get the full New State Pension if you do not have a National Insurance record before April 6, 2016.
What is my State Pension age?
Dean explains: 'Your earliest age you can start receiving State Pension is known as your State Pension age. You can find this out easily on the UK Government's website. Men born before 6 April 1951 and women born before 6 April 1953 can claim the basic state pension now, but if you were born on or after these dates, you'll be eligible for the New State Pension when you reach State Pension age.
'This age is regularly reviewed to account for factors such as affordability and life expectancy - it is currently 66 but will rise to 67 by 2028.'
How does the State Pension Triple Lock work?
Dean explained: 'The purpose of the Triple Lock is to ensure that the State Pension doesn't lose value over time. It guarantees that, each year, the State Pension will rise by the highest of three measures: inflation in the September of the previous year (as measured by Consumer Prices Index); the average increase in total wages across the UK for May to June of the previous year; or 2.5%.'
Will the State Pension be enough to fund my retirement?
Dean said: 'The reality is there's a significant gap between what you get from the State Pension and what you may actually need or want in retirement.
'The State Pension only covers a very basic lifestyle - less than is needed for a minimum standard of living in retirement, according to the Pensions and Lifetime Savings Association - and, because it only starts in your late 60s, it won't help to support you if you want to retire earlier.
'It should therefore only form part of your overall retirement plan and, so, it's important to fully understand how much you might need to save into your personal or workplace pension plan to potentially be able to afford the retirement you want. A pension calculator can help you see if you're on track.'
State Pension payments 2025/26
Full New State Pension
Weekly payment: £230.25
Four-weekly payment: £921
Annual amount: £11,973
Full Basic State Pension
Weekly payment: £176.45
Four-weekly payment: £705.80
Annual amount: £9,175
Future State Pension increases
The Labour Government has pledged to honour the Triple Lock or the duration of its term and the latest predictions show the following projected annual increases:
2025/26 - 4.1%, the forecast was 4%
2026/27 - 2.5%
2027/28 - 2.5%
2028/29 - 2.5%
2029/30 - 2.5%
State Pension and tax
The Personal Allowance will remain frozen at £12,570 over the 2025/26 financial year. The most important thing to be aware of is that people whose sole income is the State Pension will not pay income tax.
However, anyone with additional income on top of their State Pension may need to pay tax. This is paid a year in arrears, so if the 2025/26 financial year's uplift takes you over the threshold, you will not receive a tax bill from HM Revenue and Customs (HMRC) until July 2026.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Scottish Sun
2 minutes ago
- Scottish Sun
Scots civil servants offered £100k ‘cushy jobs' abroad while Holyrood faces ‘significant financial pressure'
'These cushy gigs are little more than taxpayer-funded platforms..." Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) CIVIL servants are being offered 'cushy' £100,000 pay packages to run Scottish Government offices in Denmark, Canada and China, we can reveal. The jobs are being advertised weeks after it emerged diplomats at the SNP ministers' international bases — dubbed 'pretend embassies' — have spent nearly £1million throwing 300 boozy parties. Sign up for Scottish Sun newsletter Sign up 2 Tories economy spokesman Murdo Fraser has hit out Credit: Alamy 2 Job adverts for 'Head of Scottish Government Office' roles are being advertised Credit: Getty Adverts for the 'Head of Scottish Government Office' roles promise successful applicants will have 'frequent contact' with ministers, business chiefs and cultural bigwigs. They even mention the cash crisis facing Holyrood — admitting it is a 'time of significant financial pressure for the Scottish Government'. Tories economy spokesman Murdo Fraser hit out: 'These cushy gigs are little more than taxpayer-funded platforms to bang the drum for independence abroad while Scotland's public services crumble. 'Scots want action on the state of the roads, NHS backlogs and failing schools — not more nationalist nonsense overseas. 'Hard-pressed Scots will be outraged the SNP is giving lucrative pay packages to pretend diplomats.' The jobs, in Copenhagen, Ottawa and Beijing, boast salaries of £74,480 to £85,964 with 28.9 per cent employer pension contributions boosting packages to around £100,000. Events held by the network of nine international offices include a ceilidh at a Brussels roundabout and a cheese and whisky celebration with the Swiss. External Affairs Secretary Angus Robertson said: 'We will never apologise for overseas offices that help showcase Scotland as a country open for business. "Scotland is consistently ranked best place in the UK outside of London for overseas investment.' Major Scottish Construction Firm Faces Liquidation in Dalgety Bay We previously reported how an independent review of the Scottish disability payment has called for the benefit to be simplified and made more accessible. Applying for the 'compassionate' benefit has been branded as 'soul-destroying' as part of a review commissioned by the Scottish Government. A report said the Scottish Adult Disability Payment (ADP) process was described as 'much kinder' than the UK Personal Independence Payment (PIP). But claimants still found it 'inaccessible, complex and burdensome, causing some clients significant stress and anxiety'. Led by charity leader Edel Harris, the review calls for automatic entitlement to the benefit in some cases. The Conservatives said the system 'is satisfying no one' and the SNP's persistent claim that they can run things better than Westminister 'continue to ring hollow'.
STV News
2 hours ago
- STV News
Musicians head to Berlin as part of 'Brand Scotland' trade mission
Young Scottish musicians will perform in Berlin this week as part of a UK Government effort to promote Scottish culture and attract international investment. Members of the National Youth Orchestra of Scotland (NYOS) and their guest soloist, Ryan Corbett, will perform at a business and government breakfast event at the British Ambassador's residence, hosted by Scottish secretary Iain Murray and UK's ambassador to Germany, Andrew Mitchell. The event, dubbed 'Symphony and Sausages', will see guests served smoked salmon, haggis, black pudding and homemade potato scones while showcasing Scottish music. It comes as part of efforts by the Scotland Office to boost 'Brand Scotland', promoting Scottish produce and culture in a bid to help economic growth. UK Government/Lauren Hurley Secretary for Scotland Ian Murray Murray said: 'Scotland's cultural excellence is one of our greatest assets in attracting international investment and driving economic growth. The National Youth Orchestra of Scotland represents some of our most extraordinary musical talent. I'm delighted that they are able to join me in Berlin, and this performance will demonstrate Scottish culture at its finest. 'My 'Brand Scotland' campaign is about selling all that is fantastic about Scotland to the world, to encourage both exports and inward investment in Scotland, and I'm very pleased that we have been able to fund this event in Berlin.' Brand Scotland is a key part of the UK Government's Plan for Change, bringing real rewards for people in Scotland.' The visit is part of Murray's 'Brand Scotland' trade mission to 'sell the best of Scotland to the world', forming part of the UK Government's Plan For Change. The orchestra is in Berlin to perform at the Young Euro Classic festival, premiering a new accordion concerto by Scottish composer Jay Capperauld under the baton of Catherine Larsen-Maguire. During his two-day trip, Murray will also meet German officials, including Michael Meister, Minister of State for Federal-State Relations, and representatives from Germany's 16 federal states. The breakfast is funded by a £2,700 grant from the Scotland Office's Brand Scotland fund, part of a wider UK Government programme to boost Scotland's trading relationship with Europe. Murray's visit follows the signing of a new UK-Germany treaty and comes ahead of a speech in Edinburgh where he will outline the role of Scottish culture in economic growth. The minister is also set to travel to India and Sweden as part of the 'Brand Scotland' initiative. Get all the latest news from around the country Follow STV News Scan the QR code on your mobile device for all the latest news from around the country
The Herald Scotland
4 hours ago
- The Herald Scotland
The estate that could solve Scotland's problem with trees
The forests offer much needed shade in Greece and also allow a variety of species an environment where they can thrive. Here in Scotland it may feel like there are trees everywhere, but the exact opposite is true as it is one of the least forested countries on the planet. Just drive a small distance outside of the main population centres and you will be met with miles upon miles of bleak nothingness, apart from areas that are farmland. It comes as tree planting is seen as a key tranche in achieving net zero and with a projected housebuilding timber shortage on the horizon. But Scotland's forestry industry is facing a funding black hole of £24 million and national planting targets will not be met now for at least two years. A massive budget cut has knocked the forestry industry's confidence, potentially stalling planting projects and leading to trees being destroyed. Confor, the Confederation of Forest Industries representative body, signalled a wave of concern along the supply chain from tree nurseries to sawmills and wood-panel manufacturers. Scotland has consistently failed to meet its tree planting targets, aiming to plant amounts rising from 15,000 hectares, or 30 million trees, to now 18,000 ha each year, but the industry has faced harsh funding cuts. Rural Scots are right - maybe it is time to halt onshore windfarms Trump is right for once, it is time to drill, baby drill in the North Sea It is high time that irresponsible campervan users are taxed off the NC500 We're going to need a smaller boat: The large ferry dilemma for CalMac A 41% budget cut in 2023 was only partially restored last year by around 18% to £45m. Edinburgh-based Confor said a further £24m is needed for the target mathematics to work, but that low confidence is likely to impact new projects being brought forward. However, a 10,000-acre estate in the Highlands is a great example of what can be achieved with the proper ambition. Dundreggan rewilding centre in Glenmoriston has just been awarded special European status recognising its genetic diversity of tree species. Parts of the juniper and silver birch woodland at Trees for Life's site have been classed as Gene Conservation Units. A spokesperson for the conservation charity said the 'unusually wet location' of juniper and the 'extreme westerly location' of silver birch have helped make the tree populations unique. The classification has been awarded by the European Forest Genetic Resources Network (EUFORGEN) which is managed in the UK by nature agency Forest Research. The estate uses a 'dynamic conservation' technique to protect the trees' genetic diversity. The land is encouraged to regenerate naturally within its specific environment and weather conditions. Juniper is a slow-growing evergreen shrub or small tree, with small blue-green needles and berries that ripen to a dark, blue-purple colour. The species support biodiversity by providing shelter and food for wildlife. Juniper berries are also used to produce gin. Silver birch is a fast-growing species which spreads over open ground. The tree's roots draw up nutrients, and its leaves add richness to soil. The Gene Conservation Unit status means Dundreggan's juniper and silver birch will be monitored to ensure their survival and natural regeneration. The estate covers 10,000 acres and has so many rare species living within it that environmentalists have described it as a 'lost world'. Conservation charity Trees for Life bought the site for £1.65million which remains one of the UK's largest ever areas of land bought for forest regeneration. The former hunting estate was already home to ancient forest fragments, including outstanding areas of juniper and dwarf birch. The charity has since planted half a million trees at the site, ensuring natural regeneration of woodlands and encouraging the return of rare wildlife, plants and insects. A rare non-biting midge and several other species have since been discovered after surveys of the estate. In total, more than 3,300 species have now been recorded at the charity's forest restoration site with at least 68 of these are priority species for conservation. These include unusual species such as the strawberry spider with several never having been recorded in the UK before, or were feared extinct in Scotland. While it is relatively small in the grand scheme of things, it should be an inspiration for other land owners when it comes to rewilding land and planting forests. Scotland needs more native trees and it is baffling why such a large proportion of the country is entirely treeless. The timber industry is worth around £1billion a year to the economy but even commercial plantations barely scratch the surface of what is required. It is all well and good for ministers to set tree planting targets, but without proper funding these will never be met. Ministers should see what has been done elsewhere and replicate it at pace.
