UK State Pension Changes 2016

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On Monday 18 March 2013, the Government announced that, subject to Parliamentary approval of the Pensions Bill, the single-tier pension will be introduced in April 2016.


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This reform will affect people who reach State Pension age from the time it is introduced.

Current pensioners and those reaching State Pension age prior to introduction of the single-tier pension will NOT be affected and will continue to receive their State Pension in line with existing rules.

If you reach State Pension age before 6 April 2016 you will receive your state pension in line with existing rules.

Changes will include:

If you have fewer than 35 years when you reach State Pension age you will get a pro-rata Pension.


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If you do not have a minimum number of qualifying years when you reach State Pension age (this will be set between 7 and 10 years), you will not get a single-tier pension.

You will not be able to inherit or derive rights to the single-tier pension of your spouse or civil partner.

The single-tier pension will be set above the basic level of means-tested support (£142.70 per week in 2012/13). The White Paper used an illustrative full single-tier rate of £144 per week.

Annual Increases will be based on the higher of:

  • Growth in earnings
  • Price inflation
  • 2.5% consistent with the basic State Pension now.

If you have 35 qualifying years of National Insurance contributions or credits you will get the FULL State Pension.

If you have fewer than 35 years you will get a pro-rata amount, based on the following examples.

  • 11 Years of Contributions = 11/35 of the Full Pension
  • 20 Years of Contributions = 20/35 of the Full Pension
  • 30 Years of Contributions = 30/35 of the Full Pension

However, you will need to have a minimum number of qualifying years when you reach State Pension age (this will be set between 7 and 10 years), otherwise you will not get the single-tier pension.

If you feel that you need to increase your contribution years, you can make additional contributions, but  if you do, it may be best to do this as soon as possible, as the cost of buying these additional years may go up, due to the higher pension benefit under the new scheme.

Full details in PDF download: http://dwp.gov.uk/docs/single-tier-pension-fact-sheet.pdf


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