Single-tier State Pension - contribution conditions
Looks at the contribution conditions for the single-tier State Pension to be introduced for future pensioners from 6 April 2016
The current State Pension has two tiers:
- The basic State Pension (BSP), to which people build entitlement through their NI record. People reaching State Pension age from 6 April 2010 need 30 ‘qualifying years’ for a full basic State Pension (£110.15pw in 2013/14). People reaching State Pension age before that date needed 44 (men) or 39 (women).
- The additional State Pension, which is partly earnings related and to which people can continue to build entitlement throughout working life.
The Government is legislating in the Pensions Bill 2013/14 to combine these two tiers, introducing a single-tier State Pension for future pensioners from April 2016. People who have already reached State Pension age (SPA) when the reforms are implemented will continue to receive their state pension in line with existing rules. The single-tier State Pension is to be set above the level of the Standard Minimum Guarantee in Pension Credit (£145.40 in 2013/14). An individual will need 35 ‘qualifying years’ the full amount of the single-tier State Pension. If they have fewer than 35 qualifying years, they will qualify for a proportionate amount provided they have at least ten qualifying years, with each qualifying year counting for 1/35 of the full amount. Qualifying years will be generated as now for the basic State Pension.
The Government intends that people should qualify for the single-tier pension on the basis of their own contributions, so the current rules under which people can derive an entitlement on the basis of their (former) spouse or civil partner’s contributions will end, with some transitional protection. This is covered in Library Note SN 1910 Married women and state pensions.
This note looks at the contribution conditions for the single-tier State Pension and at some of the issues raised in connection with them. The contribution conditions for the current basic State Pension are discussed in more detail in Library Note SN 3111 Basic State Pension contribution conditions.