Every year the state pension increases, due to the Government’s triple lock system. However how much you receive when you retire will depend on the National Insurance contributions you make over your lifetime.
How much is the full state pension?
The new full state pension is currently £168.60 per week.
But in April 2020, the new state pension will increase by 3.9 percent.
From April 6, 2020, the new full state pension will increase to £175.20 per week.
Those on the older basic state pension will receive an increased weekly income of £134.25.
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State pension increase: The amount you receive in your new state pension will depend on how many years worth of National Insurance contributions you have made (Image: GETTY)
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The amount you receive in your new state pension will depend on how many years worth of National Insurance contributions you have made.
To be entitled to the full state pension, you will need to have made qualifying National Insurance contributions for 35 years.
For those on the older basic state pension you will need to have made 30 years worth of National Insurance contributions.
You will get a proportion of the state pension if you have contributed between 10 and 35 qualifying years of National Insurance.
For example, if you have 15 years of qualifying NI contributions, divide £168.60 by 35, and multiply it by 15.
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In this scenario, you would receive a weekly state pension of some £72.25.
Due to the triple lock scheme, state pensions are guaranteed to increase annually.
The state pension amount is determined by whatever is higher of these three factors:
Average percentage growth in wagesThe percentage growth in princes in the UK, according to the Consumer Prices Index (CPI)2.5 percent
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A year of employment where you earn more than £166 per week from one employer, and you pay National Insurance, will count as a qualifying year.
A year where you’re self-employed and paying National Insurance contributions may also qualify.
If you earn less than £166 per week you may still be entitled to a qualifying year, if you earn between £118 and £166 per week from one employer.
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If you have not met the 35 year threshold for the state pension, you might be able to fill gaps in your National Insurance contribution record.
If eligible, you may be able to pay voluntary National Insurance contributions, usually to fill gaps from the past six years.
It may also be possible to pay for gaps more than six years ago, but this will depend on your age.
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The GOV.UK website outlines how this works HERE.
If you are able, you may also be able to increase your state pension entitlement by deferring when you receive it.
This could entitle you to increased payments, but could also mean the extra payments are taxed.
For every nine weeks you defer, the state pension increases by the equivalent of one percent.