8 things you need to know about pensions

Department for Work and Pensions

September 18
17:05 2015

Here are 8 things you need to know about pensions:

1. The new State Pension will be simple and clearer


The current State Pension is complicated.

The changes will allow people to know early on how much to expect when they reach State Pension age. This will make planning for retirement easier.

Want to know more? Go to

2. The new State Pension, like the current system, is based on National Insurance contributions


Most people build up National Insurance (NI) either through working or by receiving credits through certain benefits.

Your NI is used to calculate how much State Pension you get.

The full rate of the new State Pension will be no less than 151.25 a week. The actual amount will be set before April 2016.

But not everyone will get the same amount. In the early years of the new State Pension your NI record from the old scheme will be taken into account.

Read more about the changes. Go to

3. If you take time off work to care for a relative or child you dont have to miss out


National Insurance (NI) credits can help to fill gaps in your NI record if you arent working or dont earn enough to pay NI contributions.

Many people who are eligible for credits get them automatically. But some, like carers credits, need to be applied for.

Check how and whether you need to apply.

4. Aged 55 or over? You can get a personalised new State Pension statement


If youre 55 or over you can check how much State Pension you may get under the new system.

Its easy to get a State Pension statement.

5. You can easily check when youll reach State Pension age


Use our State Pension calculator to work out the precise date.

6. Were ending the complicated contracting-out system


You may have been contracted-out; this was where you gave up the right to the additional State Pension in return for paying less into the National Insurance (NI) system. This may have happened if you have a private or workplace pension.

But from April 2016, contracting-out will end and so will the reduced NI rate that contracted-out employees get now.

Whether youve been contracted-out or not, if you have 30 years on your NI record at April 2016, youll get at least as much from your contributions under the new State Pension as you would have under the old system.

7. It pays to join your workplace pension


Most people wanting to maintain their living standards into old age will need to have their own private provision as well, normally in the form of a workplace pension.

Weve made it easier for you to do this by getting employers to automatically enrol you into a workplace pension, if youre eligible. You can opt out if you think that pension saving isnt for you.

And it pays to save your boss will also pay towards it and you get tax relief.

Find out more about workplace pensions.

8. Its easy to get free and impartial guidance


Pension Wise is a free and impartial government service that helps you understand the options for your defined contribution pension as you reach retirement.

If youre over 50 and are considering releasing some of the money in your scheme, visit Pension Wise

Not sure of your type of pension? Contact your provider or scheme administrator.

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