State pension FAQs

Frequently asked questions

Here are answers to questions posed in a Twitter Q&A event hosted by @prospectpension

How does UK government expenditure on state pensions compare internationally?

Not well. Figures from the Organisation for Economic Co-operation and Development show we are 20 out of 28 for long term spending. The UK is forecast to spend 8.2% of GDP compared with an average of 11.7%. Only Iceland, Australia, Mexico, New Zealand, USA, South Korea, Estonia and Canada are lower. UK expenditure is set to fall as a result of recent government reforms. Yet the Treasury will get £6bn a year more through increased National Insurance contributions.

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I know State Pension Age is going up – what will it be in the future?

Under current legislation, SPA will increase to 66 in 2020, 67 in 2028 and 68 in 2046. But increases to SPA will be reviewed. The Office for Budget Responsibility estimates that SPA will be 68 by 2036, 69 by 2049 and 70 by 2063 as a result of reviews.

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One of our retired members would like to know what impact the reforms will have on her.

Changes to state pensions will not affect people who reach state pension age before April 2016. However people who reach state pension age before April 2016 may be interested in Class 3A NICs (see

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Will the new state pension system be more generous than the current one?

Overall no – there will be no increase in planned expenditure and it's set to fall over the long term. Individually some may be better off, but these will be offset by those who will be worse off.

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I'm 55 and been in work since 1979. At what age do I get state pension?

You can take your state pension from your state pension age or you can choose to defer it and take more from a later date. This calculator will tell you what your state pension age is.

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What impact will the state pension reforms have on women taking a career break to have a baby?

National Insurance Credits still exist for carers. But they will be worth less under the new system which does not have a State Second Pension.

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Can I increase my state pension if I don't have enough NI credits?

Yes. We have a briefing note on voluntary (Class 3) contributions to improve NI record.

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I am contracted out of the State Second Pension. Will I have to pay higher NI contributions? How much and when?

Both you and your employer will have to pay higher, full rate NI by April 2016 at the latest. You can see the difference in our calculator.

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Does having a very small private pension (a couple of years worth) from years ago affect the state pension?

Someone who has been in a private or occupational pension scheme that was contracted out of the State Second Pension may find that they do not qualify for the full level of the single tier state pension.

But they will get no less than under current system and could get more if making full NI contributions after April 2016.

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