What is the basic state pension?
The basic State Pension is money you may be able to get when you reach State Pension age. The amount you receive depends on the qualifying years you have built through your National Insurance contributions.
There are two circumstances to be considered:
If you reach State Pension age before 6 April 2010, you normally need to have 44 qualifying years to be entitled to the full basic State Pension if you are a man, or 39 qualifying years if you are a woman. In this case, to get any State Pension you need to meet two minimum conditions:
• you must have at least one qualifying year where you have paid or have been treated as having paid enough NI when you are in employment or voluntary Class 3 contributions.you cannot get any basic state Pension based on NI credits alone.(You will normally get NI credits when you are ill, unemployed or getting Carer’s Allowance)
• you must have at least 25% of the qualifying years needed for for a full basic state pension(11 years for a man and 10 years for s woman)to get any basic state Pension.
You will not be entitled to a refund of the NI contributions you have paid because those contributions pay towards other benefits like sickness, unemployment, and bereavement benefits.
If you reach State Pension age on or after 6 April 2010, the current contributions conditions are being replaced with new rules:
• the number of qualifying years needed to get a full basic State Pension will be reduced to 30 for women and men .
• you will no longer need to have 25% of the qualifying years needed for a full basic state Pension to get any basic State Pension.
• you will no longer have to have at least one qualifying year where you have paid NI contributions.
The minimum state pension amount is £21.83 a week and the maximum amount is £87.30 a week in 2007/08 tax year.
In order to make up for time when you did not pay NI , you may be able to pay NI Class 3. You have to pay the contributions within six years of the end of the tax year the payment is for.
If you are still confused about State Pension, Taxfile in South London can help you get a better understanding of it, explaining you the importance of filling in a retirement pension forcast form called BR19 so you know exactly where you stand.