To be eligible for a UK state pension, you need to have been employed or self-employed in the UK and/or have made National Insurance Contributions for a certain minimum number of years (which could include voluntary contributions or time spent in child care).
These years of National Insurance contributions are referred to as “qualifying years”. Depending on your age, the number of years that you need to qualify for a minimum pension will vary. There are three main groups of pensioners.
To see where you stand with regard to your pension, place yourself in one of three categories that may apply:
1)Men born before 6th April 1945 and women born before 6th April 1950
These people reached pension age (65 for a man and 60 for a woman) before 6th April 2010. A man needs a minimum of 11 years National Insurance contributions and a woman needs a minimum of 10 years National Insurance contributions to get any pension at all. At this late stage, just one voluntary payment can be made to top-up your pension contributions to meet the minimum, and only if you reach pension age in 2009/10.
2)Men born on or after 6th April 1945 and before 6th April 1951. Women born on or after 6th April 1950 and before 6th April 1953
Men in this group reach pension age at 65. Women reach pension age somewhere between 60 and 63 (as the pension age is steadily rising to match that for men). People in this group get some pension forevery year of National Insurance contributions. A full pension requires 30 years’ contributions, and one year gets 1/30th of a full pension which currently stands at £113 per week. Between two and seven voluntary contributions can be made to top-up your contributions depending on your pension date.
3)Men born on or after 6th April 1951 and women born on or after 6th April 1953
The pension age for men in this age group is steadily increasing, starting at 65 for men and 63 for women.
People in this group reach pension age on or after 6th April 2016, and will need a minimum of 10 years’ National Insurance contributions. 35 years are needed to get a full pension of about £160 per week. Also you can make a minimum of 10 voluntary payments to top up your pension contributions.
Voluntary contributions are a very good investment. The usual Class 3 contribution costs about £700 for each year purchased, and this is recouped in under 4 years once your pension starts. The Class 2 contribution, usually available to people who are working, costs only £143 for each year, and is recouped within the first year of pension. You must have worked 3 years in the UK, or lived in the UK for 3 continuous years to qualify.
A partial pension is simply prorated based on the number of qualifying years you have. For example, if you have 10 qualifying years, then you would be eligible for a pension equal to 1/3 of the full pension amount. For 2013, the full UK state pension is £5,727 per annum.
These qualifying years provide what is known as a Category A Pension. In addition, the spouse or civil partner of someone receiving a Category A pension may be entitled to receive a Category B pension, even if they have never worked in the UK, lived in the UK, or even visited the UK themselves. The Category B pension is based on a percentage of the Category A pension being received by the main pensioner, (approximately 60%).